Mark Hurd

Mark Hurd

Hurd at Oracle in 2010
Born Mark Vincent Hurd
(1957-01-01) January 1, 1957
Manhattan, New York, U.S.
Residence Palo Alto, California, U.S.
Education Baylor University
Occupation Co-CEO of Oracle
Salary US$53.2 million (2015)[1]
Spouse(s) Paula Hurd

Mark Vincent Hurd (born January 1, 1957) is co-CEO of Oracle Corporation, and the past chairman, chief executive officer, and president of Hewlett-Packard. At Hewlett-Packard, Hurd succeeded CFO Robert Wayman, who served as interim CEO from February 10, 2005 to March 28, 2005, after former CEO Carly Fiorina was forced by the board to resign.[2] On September 22, 2006, Hurd succeeded Pat Dunn as chairman after she resigned after the pretexting controversy.[3] Hurd resigned his positions at HP on August 6, 2010, following an investigation into a claim of sexual harassment made by a former reality TV actress.[4][5][6] The probe concluded that the company's sexual-harassment policy was not violated, but that its standards of business conduct were.[7]

Hurd was a member of the Technology CEO Council, a coalition of chairmen and chief executive officers of IT companies, which develops and advocates public policy positions on technology and trade. He served on the board of directors of News Corporation until 2010.[8][9]

Education and personal life

Mark Hurd and wife, Paula Hurd

Hurd graduated in 1979 with a BBA (Bachelor's degree in Business Administration) from Baylor University, which he attended on a tennis scholarship, and was also a member of Phi Delta Theta at Baylor.[10] In 2009, Baylor named its tennis complex the Hurd Tennis Center after he helped fund its renovation.[11]

Hurd is married to Paula Hurd (née Kalupa).

NCR (1980-2005)

Hurd spent 25 years at NCR Corporation, culminating in a two-year tenure as chief executive officer and president. His leadership was marked by successful efforts to improve operating efficiency, bolster the product line and build strong leadership. In the fiscal year of 2004, NCR generated revenue of $6.0 billion, up 7 percent from a year earlier, and net income rose nearly fivefold to $290 million. He was named president of NCR in 2001 and was given additional responsibilities as chief operating officer in 2002. He began working for NCR as a junior salesman in San Antonio in 1980, and subsequently held a variety of positions in general management, operations, and sales and marketing. He also served as head of the company's Teradata data-warehousing division for three years.[12]

Hewlett-Packard (2005–2010)

This chart shows the share price of NCR, Hewlett-Packard and Oracle during Mark Hurd's tenure.

After the board forced Chairman and CEO Carly Fiorina to resign in January 2005 for inconsistent profits and problems with executing the acquisition of Compaq, Executive Vice President CFO Robert P. Wayman became interim CEO for several months. Hurd was appointed permanent CEO and also held the title of President, a post which was not used by several of his predecessors (Michael Capellas was President of HP for a transitional period in 2002 after its merger with Compaq). Hurd was also elected to the board of directors but unlike previous CEOs, he was initially not designated to be chairman of the board which was instead filled by a non-executive director. On September 22, 2006, Hurd succeeded Pat Dunn as board chairman after she resigned after the pretexting controversy.[3]

Under his leadership, the company has been the first in the sale of desktop computers since 2007, and laptop computers since 2006. In 2008, it also increased its market share in inkjet and laser printers to 46% and 50.5%, respectively.[12] Hurd forecast that in 2009, HP's sales could drop as much as 5% in the midst of the recession, but its profit increased by nearly 6%.[12] Under Hurd's tenure, the company met Wall Street expectations in 21 out of 22 quarters and increased profits for 22 straight quarters, while its revenue rose 63 percent and stock price doubled.[13]

While the merger of Hewlett-Packard and Compaq was heavily criticized back in 2002, Hurd apparently managed to make the combined company execute successfully, something his predecessor Fiorina had failed to do. The New York Times said Hurd had "pulled off one of the great rescue missions in American corporate history, refocusing the strife-ridden company and leading it to five years of revenue gains and a stock that soared 130 percent".[14]

In 2007, Hurd was named one of Fortune Magazine's 25 Most Powerful People in Business.[15] He was recognized multiple times by Business 2.0 magazine as one of the 50 Who Matter Now and by Barron's in its Best CEOs lists. The San Francisco Chronicle honored him as the 2008 CEO of the Year.[16] He appeared on CRN's 25 Most Influential Executives list in three separate years and was twice one of CRN's Top 25 Executives.[17] Mark Hurd was listed as one of Forbes' Market's Best Managers for 2009.[18] Hurd was considered one of the "TopGun CEOs" in 2009 by Brendan Wood International, an advisory agency.[19][20]

Management style

Hurd was said to have run HP "with a founder’s authority. He was for all intents and purposes the CEO, CFO, COO, and head salesman".[13]

Hurd has a reputation for aggressive cost-cutting. He laid off 15,200 workers  — 10% of the workforce — shortly after becoming CEO. Other cost-cutting includes reducing the IT department from 19,000 to 8,000, reducing the number of software applications that HP uses from 6,000 to 1,500, and consolidating HP's 85 data centers to 6. During the 2009 recession, Hurd imposed a temporary 5% pay cut on all employees and removed many benefits. He himself took a base salary pay cut of 20%, although the compensation committee increased his bonus by the same amount. Following the acquisition of EDS, Hurd instructed that all EDS employees should have their salaries adjusted to match the salaries of their HP counterparts, with pay cuts of as much as 20%. He promised that those employees below scale would see their pay scales adjusted through an internal process that never materialized.[12]

Hurd's cost-cutting was initially considered necessary. However, later in his tenure it became harder to find waste, and the results became extreme, with "employees practically needed an act of Congress to get approval to buy a piece of software" and "the lights shut off automatically at 6 p.m. every day, effectively forcing workers to go home" from the Fort Collins, Colorado office.

Hurd's emphasis on short-term results and financial management (particularly cutting costs), taking the lead in the PC business, plus acquisitions (EDS and 3Com), were successful in raising profits and shareholder return. Detractors, however, viewed it as a continuation of empire building, which started with the acquisition of Compaq in 2002 several years before Hurd joined HP. While rival IBM purchased dozens of smaller companies to fill specific needs, HP had spent billions on several major acquisitions in an attempt to transform itself. As of December 7, 2012, Hewlett-Packard Co.'s market value was less than what it had spent on acquisitions during the last five years.

While HP was previously known for a culture of employee autonomy and creativity, known by the company founders as the "HP Way", this philosophy was discarded under Hurd and his predecessor Carly Fiorina. Employee morale was low, and Hurd's pay cuts did cut costs but soon had the effect of deterring talent as many of the best managers left HP.

HP had failed to innovate a successful consumer product in recent times despite relying heavily on hardware sales, which gradually saw HP lose its status as one of the United States' preeminent technology companies. According to an analyst, “Mark Hurd was cutting costs and doing a good job of it. But you can’t cut costs forever, and investors wanted to see growth.” Cutting research and development also weakened EDS and prevented it from developing new software.

Although financial results during Hurd's first few years at the helm seemed to vindicate this strategy, the underlying problems that his management style fostered would soon surface in 2010. Apple's iPad was launched that year and it would hurt makers of desktops and laptops, of which HP was the number one PC manufacturer. The acquisition of Palm Inc. for WebOS was supposed to let HP compete in the fledgling smartphone and tablet business, but this was jettisoned in 2011 (after Hurd's departure) after the failure of TouchPad. In 2012 HP wrote down $8 billion of the $13.9 billion purchase of EDS (renamed HP Enterprise Services), which was originally intended to compete with IBM; however, most of its outsourcing contracts tended to be low-margin instead of the more lucrative complex technological business that IBM enjoyed. Furthermore, EDS was not integrated with HP's other major business units and it was plagued by high staff departures (in part due to Hurd's pay cuts).

Hurd had to contend with a board of directors which was described as dysfunctional, due to rivalries between different factions on the board. These fissures became apparent after his forced departure due to tension between his supporters and detractors.

Resignation

On August 6, 2010, he resigned from all of his positions at HP, following discovery of inappropriate conduct in an investigation into a claim of sexual harassment made by HP exhibition contractor and former reality TV actress Jodie Fisher, with whom he had a close friendship.[4][5][6][21] The probe concluded that the company's sexual-harassment policy was not violated, but in the course of investigating the allegations, they had found breaches of HP's standards of business conduct,[7] in that Hurd had used his expenses to pay for, and cover up, around $20,000 of personal expenses and travel related to her, that payments were made to her which had no valid business purpose and that Hurd had breached the company's code by failing to disclose the personal involvement with a colleague.[22][23] Outside observers suggested that the company may have had an ulterior or at least mixed motive in requiring his resignation, and the presence of minor breaches of expenses and company policies was a convenient means to obtain quick closure, leading to suggestions that the HP board may have "freaked out" and ousted Hurd.

Evidence said to support this interpretation included that Hurd was permitted to resign and was not fired for cause, as would usually be the case, that he was given a reported $40 million bonus, that apparently the errors were few and no systematic pattern of concealment and errors was shown, ambiguity in HP's internal report that suggested the matter may not have been deliberate ("...intended to or had the effect of concealing..."), information about a presentation to the HP board by an APCO PR specialist concerning the likelihood of a lengthy aggressive negative PR campaign in the mass media by the woman's celebrity lawyer against HP and its executive's conduct if the matter proceeded, and HP's own internal finding that no sexual harassment had taken place.[24]

Reportedly, the HP board voted 6-4 to oust Hurd.[25] The letter[26] containing the initial allegations was eventually published by the New York Times on December 29, 2011.[27] after the Delaware Supreme Court ruled that it may be made public.[28] Hurd said he "realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP", and added that he believed it would be "difficult to continue as an effective leader at HP."[7] In exchange for releasing HP from future litigation, Hurd received $12.2 million in severance, plus vested options and restricted stock for an estimated total of $34.6 million.[29][30]

Shares of HP dropped as much as 8.4% in after-hours trading, hitting a 52-week low and shaving off $9 billion in market capitalization, when news of his forced departure was made public. Analysts attributed this to the sudden void of an executive perceived as bringing a period of consistency and out-performance to the company. BusinessWeek reported that "at least 100 top executives" have left HP since Hurd's departure, citing "tumult in Hewlett-Packard’s C-suite." [31]

Views were mixed between those who saw it as a commendable tough action by HP in handling expenses irregularities, an area where HP had deliberately set out to tighten up following a previous scandal in 2006, and those who saw it as an ill-advised, hasty and expensive reaction to a potential PR issue, by ousting a remarkably capable leader who had turned the business around.[22][23][32] Oracle Corporation's CEO, Larry Ellison, a close friend of Hurd,[33][34] sent an e-mail to the New York Times saying "the HP Board just made the worst personnel decision since the idiots on the Apple Board fired Steve Jobs many years ago. That decision nearly destroyed Apple and would have if Steve hadn't come back and saved them. HP had a long list of failed CEOs until they hired Mark who has spent the last five years doing a brilliant job reviving HP to its former greatness".[35] Steve Jobs himself tried to talk Hurd into staying, according to a BusinessWeek story, and "even offered to write a letter to HP’s directors and to call them up one by one." [13] Fisher herself expressed regrets at the outcome.[22]

Compensation

In 2008, Hurd's total compensation was $39,952,237, including a base salary of $1,450,000, stock award of $7,907,660, cash bonus of $23,931,882, and $662,695 in perquisites and other compensation.[36] It was the largest bonus of any CEO in 2008, although Hurd would implement a wage freeze on his employees.[37]

In 2009, Hurd made a total of $24,201,448, including a base salary of $1,268,750, stock award of $6,648,092, cash bonus of $15,809,414 and $475,192 in benefits and other compensation.[38] Hurd said he believes in what he calls "pay for performance", such that employees have a substantial part of their salaries "at-risk", which gets paid only when the company's performance measures up.

Lawsuit

On 10 August 2010 shareholders in HP filed a derivative lawsuit following Hurd's departure from the corporation. The suit seeks unspecified damages and changes to HP's corporate governance. It claims that HP lost "significant credibility" due to the controversy and a loss of $9 billion in market capitalization when shares began trading the Monday after Hurd's resignation, and that his severance package could have been significantly smaller if HP's board fired him for cause. Brockton Contributory Retirement System filed the suit against Hurd and against HP's board members on behalf of shareholders.[39]

Oracle Corporation (2010–present)

On September 6, 2010, Hurd was named co-president and member of the board of Oracle Corporation by CEO Larry Ellison. Hurd succeeded Charles Phillips and is currently working to streamline the signup and upgrade process for clients.[40] Safra A. Catz remains the other Oracle co-president. On September 18, 2014, Ellison announced he was stepping down as CEO with Hurd and Catz becoming co-CEO's.[41]

Bibliography

References

  1. ↑ http://www1.salary.com/Mark-V-Hurd-Salary-Bonus-Stock-Options-for-ORACLE-CORP.html
  2. ↑ "HP Chairman and CEO Carly Fiorina Steps Down" (Press release). Hewlett-Packard. 2005-02-09.
  3. 1 2 "Mark Hurd Named HP Chairman, In Addition to His Roles as President and CEO" (Press release). Hewlett-Packard. 2006-09-22.
  4. 1 2 Actress Is Identified in Hewlett-Packard Scandal, NYtimes.com
  5. 1 2 Connie Guglielmo; Ian King & Aaron Ricadela (2010-08-07). "HP's Mark Hurd Resigns After Sexual-Harassment Probe". Bloomberg News.
  6. 1 2 "HP CEO Mark Hurd Resigns; CFO Cathie Lesjak Appointed Interim CEO; HP Announces Preliminary Results and Raises Full-year Outlook" (Press release). Hewlett-Packard. 2010-08-06.
  7. 1 2 3 Jordan Robertson & Rachel Metz (2010-08-06). "HP CEO Mark Hurd Resigns After Sexual-Harassment Probe". Huffington Post.
  8. ↑ Adegoke, Yinka (August 31, 2010). "UPDATE 2-Ex-HP CEO Hurd leaving News Corp board". Reuters.
  9. ↑ Bercivici, Jeff (August 31, 2010). "Mark Hurd Stepping Down from News Corp. Board". Daily Finance.
  10. ↑ Pimentel, Benjamin (March 30, 2005). "Mark Hurd has earned a name at Hewlett-Packard". The San Francisco Chronicle.
  11. ↑ "Hurd Tennis Center". Baylor University.
  12. 1 2 3 4 Lashinsky, Adam (2009-03-03). "Mark Hurd's moment". Fortune. Retrieved 2009-07-15.
  13. 1 2 3 "Can Meg Whitman Reverse Hewlett-Packard's Free Fall?". Bloomberg. January 10, 2013. Retrieved January 18, 2013.
  14. ↑ Stewart, James B. (September 21, 2011). "Voting to Hire a Chief Without Meeting Him". The New York Times.
  15. ↑ "25 most powerful people in business: Mark Hurd". Fortune.
  16. ↑ Kim, Ryan (2008-04-20). "Mark Hurd has earned a name at Hewlett-Packard". San Francisco Chronicle.
  17. ↑ "The 25 Most Influential Executives Of 2010: Mark Hurd, President, Oracle". CRN. 2010-11-22.
  18. ↑ Hardy, Quentin (2010-03-25). "Hewlett-Packard's Mark Hurd: He Wants It All". Forbes. Archived from the original on 2013-06-16.
  19. ↑ "The Market's Best Managers", Forbes.com
  20. ↑ "TopGun CEOs in the US", Reuters.com
  21. ↑ Vance, Ashlee (August 6, 2010). "Hurd Resigns From H.P. After Sexual Harassment Inquiry". The New York Times.
  22. 1 2 3 Worthen, Ben; Lublin, Joann S. (August 8, 2010). "Mark Hurd Neglected to Follow H-P Code". The Wall Street Journal.
  23. 1 2 "Breaking News, Analysis, Politics, Blogs, News Photos, Video, Tech Reviews - TIME.com". Time. August 10, 2010.
  24. ↑ http://www.businessinsider.com/backlash-against-hewlett-packard-grows-it-seems-mark-hurd-fired-because-company-scared-of-bad-pr-over-bogus-sexual-harassment-allegation-2010-8
  25. ↑ Vance, Ashlee; Richtel, Matt (August 9, 2010). "In Ousting Hurd, Hewlett Took a P.R. Firm's Advice". The New York Times. Retrieved August 10, 2010.
  26. ↑ Letter to Mark Hurd Alleging Harassment
  27. ↑ Letter That Led to Downfall of Hewlett Chief Surfaces (New York Times, December 29, 2011)
  28. ↑ HP Ex-CEO Hurd Pursued Sex With Jodie Fisher: Letter (Bloomberg)
  29. ↑
  30. ↑ "HP's Hurd latest CEO to get lucrative exit payout". Reuters. August 9, 2010. Retrieved August 10, 2010.
  31. ↑ "One Hundred Top Employees Who Left Hewlett-Packard Since 2010". Bloomberg. January 11, 2013. Retrieved January 18, 2013.
  32. ↑ Vance, Ashlee; Richtel, Matt (August 9, 2010). "H.P. Followed a P.R. Specialist's Advice in the Hurd Case". The New York Times.
  33. ↑ "Executives' Privilege? In Boardroom, Sex Seldom Leads to Censure". The Washington Post. September 16, 1998.
  34. ↑ Elmer-DeWitt, Philip (August 10, 2010). "(Updated) Mark Hurd, Larry Ellison, Steve Jobs?". CNN.
  35. ↑ Vance, Ashlee (August 9, 2010). "Oracle Chief Faults H.P. Board for Forcing Hurd's Resignation". The New York Times.
  36. ↑ Darlin, Damon. "Times Topics: Mark V. Hurd". The New York Times. Retrieved 2009-07-15.
  37. ↑ Jones, Kathryn (April 5, 2009). "The Pay at the Top". The New York Times. Retrieved 2009-07-15.
  38. ↑ 2009 CEO Compensation Data for Mark V. Hurd, Equilar
  39. ↑ "HP shareholders file suit over CEO's exit". The Washington Post. August 14, 2010.
  40. ↑ Mark Hurd: Oracle’s only objective is to help customers CIO Asia, May 2, 2012
  41. ↑ Oracle Board Appoints Larry Ellison Executive Chairman and CTO
Business positions
Preceded by
Patricia C. Dunn		 Chairman of Hewlett-Packard
2006–2010 		Succeeded by
Ray Lane
Preceded by
Robert Wayman		 Chief Executive Officer of Hewlett-Packard
2005–2010 		Succeeded by
Léo Apotheker
Preceded by
Carly Fiorina		 President of Hewlett-Packard
2005–2010 		Succeeded by
Léo Apotheker
Preceded by
Charles Phillips
Safra A. Catz		 co-President of Oracle Corporation
(along with Safra A. Catz)
2010–present 		Succeeded by
incumbent
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