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By | Brid-Aine Parnell 26th September 2012 10:31

Ex-HP boss Mark Hurd's $53m gold parachute approved by judge

Worth every penny just in entertainment value

A US judge has dismissed a shareholder lawsuit against HP's board of directors over its bumper severance payment to ex-CEO Mark Hurd.

District Judge Edward Davila said investors had failed to prove that the board's approval of Hurd's big package was not in the company's best interest.

Hurd, now president of rival Oracle, left HP under a cloud: although he was cleared of sexual harassment allegations brought by Playboy model and HP hostess Jodie Fisher, he was found to have filed inaccurate expenses claims to hide his two-year effort to woo her.

Despite the inauspicious end to his time at HP, the board sent him on his way after his resignation with more than $12m in cash, and thousands of performance-based stock units, stock options and restricted stock units and other benefits, which the court valued at about $53m.

The shareholders alleged that the payout was excessive and that the company got nothing out of it.

But the judge disagreed, saying that despite the fact that the amount "may appear extremely rich or altogether distasteful to some", the plaintiffs had failed to show that HP had suffered significant losses during Hurd's time as CEO or that he was a bad executive.

However, the judge did give the shareholders 30 days to come up with an amended complaint to revive the case.

Meanwhile, new-ish HP CEO Meg Whitman faces an uphill battle to get HP back on track, according to rival chief exec John Chambers of Cisco.

"There's not been a company ever turned around by the fifth CEO on the job," he told Reuters in an interview.

Chambers reckoned there was potential for Hewlett-Packard if it moved into the cloud and away from PCs to tablets, but it would have to move fast before it was too late.

"It's a tough hand to play, but clearly as a competitor I like competing against that hand, and we are going to try and accelerate while they are struggling," he added. ®

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