Hurd walks away with more than $12 million

06.08.2010
Mark Hurd may have been forced to resign as CEO of HP for conduct deemed inappropriate by his board, but he won't be leaving empty-handed.

According to the filed with the Securities and Exchange Commission, Hurd will earn a severance payment of US$12.2 million. He will also be able to cash in on various large stock opportunities, including 330,177 performance-based restricted stock units that were granted to him in 2008. He was also given an extension until Sept. 7 of the expiration date of outstanding options to purchase up to 775,000 shares of HP stock that were vested as of Friday.

In exchange, Hurd signed "a general release of claims in favor of HP," according to the filing.

On Friday, HP announced that Hurd agreed to resign after a former marketing consultant alleged that he sexually harassed her. An investigation found that Hurd had a personal relationship with the consultant that he hid from the board and covered up using inaccurate expense reports.

HP CFO Cathie Lesjak will serve as interim CEO while the board hunts for a permanent replacement for Hurd.

His payout appears to be close to the terms set out in the company's severance plan for a CEO who is involuntarily dismissed, not for cause. An HP CEO who is involuntarily dismissed, not for cause, is eligible for two times their base pay plus the average annualized bonus paid during the preceding three years, according to . Hurd's base pay in 2009 was $1.2 million and total bonuses from 2007 to 2009 amounts to $7.9 million.