Mark Hurd

Mark Vincent Hurd
Mark Hurd at Oracle in 2010.
Born	(1957-01-01) January 1, 1957 Flushing, New York, U.S.
Education	Baylor University
Spouse	Paula Kalupa

Mark Vincent Hurd (born January 1, 1957) is co-president, director, and board member 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. On September 22, 2006, Hurd succeeded Pat Dunn as chairman after she resigned after the pretexting controversy. Hurd resigned his positions at HP on August 6, 2010, in the wake of a sexual harassment controversy.

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.

Education

Hurd graduated in 1979 with a BBA (Bachelor's degree in Business Administration) from Baylor University, which he attended on a tennis scholarship.

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.

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.

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. 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%. 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.

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.[2] 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". In 2009, Hurd was considered one of the "TopGun CEOs" by Brendan Wood International, an advisory agency.

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".

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. Hurd imposed a 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.

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.[3]

Hurd's emphasis on short term results and financial management (particularly cutting costs), taking the lead in the PC business, plus acquisitions (EDS, 3Com, and 3Par), 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 jointed HP.[4] 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.[5] 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.[6]

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.[7][8]

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.[9] 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.”[10] Cutting research and development also weakened EDS and prevented it from developing new software.[11]

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 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 (originally intended to compete against IBM, renamed HP Enterprise Services), 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).[12][13][14][15][16]

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.[17][18]

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 former reality TV actress Jodie Fisher. The probe concluded that the company's sexual-harassment policy was not violated, but that its standards of business conduct were. Reportedly, the HP board voted 6-4 to oust Hurd following the advice of a public relations specialist.

After the Delaware Supreme Court ruled that it may be made public, a letter containing details of the sexual harassment claim was published by the New York Times on December 29, 2011.

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." 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.

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."

Oracle Corporation's CEO, Larry Ellison, a close friend of Hurd, 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".

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."

Compensation

In 2008, Hurd's total compensation was $33,952,237, 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. It was the largest bonus of any CEO in 2008, although Hurd would implement a wage freeze on his employees.

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. 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

A shareholder derivative lawsuit has been filed following the imbroglio over Hurd's departure. 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. The suit was filed on behalf of shareholders by Brockton Contributory Retirement System against Hurd, and HP's board members.

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. Safra A. Catz remains the other Oracle co-president.

Bibliography

• The Value Factor: How Global Leaders Use Information for Growth and Competitive Advantage by Mark Hurd and Lars Nyberg, Bloomberg Press, 2004, ISBN 1-57660-157-9
• Fall 2003 Baylor Business Review "Enterprise Decision-Making" by Mark Hurd, ISSN 0739-1072

External links

• Oracle Executive Biography of Mark Hurd
• An HP Executive Team Biography of Mark Hurd
• Fall 2006 Baylor Business Review Q&A with Mark Hurd
• Fall 2006 Baylor Business Review "Five Leadership Tips from Mark Hurd"
• Fall 2003 Baylor Business Review "Enterprise Decision-Making"
• BBC article on appointment to Hewlett-Packard
• H-P CEO "Mark Hurd speaks", March 30, 2005
• Kellogg School of Management's Digital Frontier Conference - Mark Hurd is keynote speaker, January 17 and 18, 2003
• Meet H-P’s New Boss - ZDNet - CNET Networks
• Mark Hurd: Technology Transformation Takes Commitment, Investment, Government Technology Magazine, May 2009