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HP Investigating Details of Former CEO's Severance Package

Multinational Information Technology Corporation Hewlett-Packard, the world's largest maker of computers, is currently in the mist of investigating the details surrounding the forced resignation of its former CEO Mark Hurd.

Hurd was forced out last year following accusations of sexual harassment and keeping inaccurate expense reports. As part of his severance package, Hurd reportedly received a $12.2 million cash payout. He has also filed papers to sell around $30 million worth of stock received as stock options under the agreement.

HP also agreed to void a non-compete agreement which would have prevented Hurd from working for Oracle Corp., a major competitor of HP. In return, Hurd will be paying $14 million in restricted stock back to HP. As a result of the settlement, Hurd is now currently serving as co-president at Oracle.

HP Shareholders reportedly demanded the investigation, which will be conducted by members of the HP board of directors hired after Hurd left the company. Shareholders are claiming that HP committed "corporate waste" in agreeing to Hurd's severance package.

Since Hurd left, HP let four former directors go four directors go and hired 5 more. The new directors increase the number of directors with backgrounds in foreign markets. Such an extensive remodeling of a board of directors is apparently unusual for a company. HP's new board of 13 directors will include three women, which is a higher number than most corporate boards

According to a 2009 survey by a New York based research organization, less than 20 percent of Fortune 500 companies have three or more women on their board of directors.

Concerned about months of previous leaks, HP's new board appointments come along with stricter rules on how directors are allowed to interact with the press.

Source: Associated Press, "HP to investigate Mark Hurd's departure, severance," 21 Jan 2011.

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