|Mark Hurd, ousted as Hewlett-Packard’s CEO, is now copresident at Oracle. He spoke at a company conference yesterday but did not address the tensions between the companies. (Tony Avelar/ Bloomberg News)|
Ousted chief, HP settle suit over job
Under the terms of a settlement disclosed yesterday after the stock markets closed, Hurd agreed to relinquish stock he was given in his severance package. The shares are worth nearly $14 million, based on yesterday’s closing price of $39.39.
HP and Oracle said in a joint statement that Hurd will be able to perform his duties as an Oracle copresident without spilling HP’s trade secrets.
Earlier yesterday, Hurd made his public debut as a copresident at Oracle, showing off a new data-storage computer at the company’s annual conference.
Hurd was forced out as HP’s chief last month following a sexual harassment investigation. He accepted the post with Oracle in early September, prompting HP’s lawsuit.
Oracle’s CEO, Larry Ellison, evidently did not want to risk having Hurd handcuffed by the lawsuit.
After publicly scolding HP’s board for its “vindictive’’ act, Ellison privately called HP director Marc Andreessen to start negotiating a settlement of the Hurd lawsuit, a person familiar the talks said. This person was not authorized to speak publicly.
An Oracle spokeswoman declined to comment on how the settlement came about.
Previous legal precedents made it unlikely that HP could have prevailed in the case, but Oracle probably realized the lawsuit could have distracted Hurd for months, said a New York employment lawyer, Stephen Kramarsky.
“I don’t see this as a big win or a big loss for either side,’’ Kramarsky said. “It was probably more about realizing that these two companies have a very important business relationship, so what’s $14 million among friends?’’
By insisting that Hurd surrender some of his severance package, HP was able to save face with shareholders, who have suffered a combined $16 billion hit to the value of their stock since Hurd’s ouster.
Hurd’s appearance on stage yesterday reinforced the important role he is expected to play at Oracle despite the controversy, which he did not address during his talk at the conference.
Hiring Hurd was a coup for Oracle. Ellison, who is also Hurd’s tennis buddy, is shifting Oracle into direct competition with the computer and server maker it has long partnered with. The rivalry between HP and Oracle intensified when Oracle closed its acquisition of Sun Microsystems early this year; HP has said that hiring Hurd has further strained the companies’ alliance.
After the settlement was announced, Ellison said in a statement that the companies would continue to “build and expand’’ on their decades-long partnership. HP made a similar pledge.
While HP’s stock price plunged after Hurd’s departure, Oracle’s has leaped since it brought him on board. Hurd was reviled by many HP employees for the depth of his job cuts, but revered on Wall Street for his cost-cutting and stewardship in leading HP into new markets beyond printer ink and personal computers.