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Larry Ellison, CEO of Oracle Corp.  (Source: AP)

Mark Hurd, former CEO of Hewlett-Packard Company, new Co-President at Oracle Corp.  (Source: AP)
Oracle CEO responds to suit against new Oracle Co-President Mark Hurd

It's been a wild ride for former Hewlett-Packard CEO Mark Hurd.  Under Mr. Hurd's savvy leadership HP leapt from second place in the personal computer industry to beat Dell and become the world's largest computer manufacturer.  Then Mr. Hurd was slapped with a shocking sexual harassment suit from a former contractor.  Forced to resign, Mr. Hurd has now been granted a Co-President position at Oracle Corporation.

But the ride is far from over.  HP has filed suit [Scribd] against Mark Hurd, seeking to block him from assuming his role at Oracle.

The suit claims that by working at Oracle Mr. Hurd is violating confidentiality agreements that were part of a severance package he received when agreeing to resign.  On its corporate blog, the company's legal team writes, "Mark Hurd agreed to and signed agreements designed to protect HP's trade secrets and confidential information. HP intends to enforce those agreements."

Unfortunately for HP, Mr. Hurd did not sign a non-compete agreement when resigning.  Thus the company may lack the legal firepower to stop him from working at Oracle.  And even a non-compete isn't always sufficient to bring a swift outcome as highlighted by IBM's recent suit against Apple-hire Mark Papermaster, a drawn out case that was eventually settled out of court.

To top it off, HP gave Mark Hurd $40M USD in severance money.  Thus the company now finds itself in the awkward position of trying to combat Mr. Hurd's legal team, which it essentially funded.

Oracle CEO Larry Ellison, a close friend of Mark Hurd's since the days when Mr. Hurd was President and Chief Operating Officer of NCR, is by no means keeping quiet about the case.  He unleashed a sharply worded tirade against HP, saying that he may cut ties with it if the suit continues.

He comments:

Oracle has long viewed HP as an important partner.  By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees.   The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace.

That hard stance could wind up hurting Oracle's bottom line as HP is a key business partner.  However, it will likely hurt HP even more, given the fact that it's struggling under the loss of several key executives, including Mr. Hurd.

Oracle is the world's third largest software maker, behind only Microsoft and IBM.  In 2009 it acquired Sun Microsystems, the crown jewel of a $30B USD campaign of acquisitions.



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Happened Quickly
By Suntan on 9/8/2010 2:21:16 PM , Rating: 2
Taking a step back, considering that both HP and Oracle run in pretty much the same circles as far as customers, suppliers, etc. are concerned; what differences are there between HP’s board and Oracle’s board that makes Hurd’s transgressions insta-fire worthy at one, but still insta-hire worthy at the other?

Did HP over react, or does Oracle just have little regard for ethically suspect activities by it’s executive staff?

-Suntan




RE: Happened Quickly
By soloman02 on 9/8/2010 2:46:52 PM , Rating: 2
Well seeing how HP's stock took a big hit and Oracle's stock went up it appears as though the shareholders think the HP board way overreacted on firing Hurd. Keep in mind Hurd made HP a lot of money in five years. HP's stock being down indicates that the shareholders placed more value in Hurd's money making ability as a CEO than his alleged ethics violations.

Hurd settled the case out of court most likely because he wanted as little publicity as possible so that it would not distract him or the employees surrounding him from making HP more money.


RE: Happened Quickly
By nolisi on 9/8/2010 3:33:07 PM , Rating: 2
quote:
HP's stock being down indicates that the shareholders placed more value in Hurd's money making ability as a CEO than his alleged ethics violations.


Not necessarily. HP's stock dive could be simply a response to negative news, rather than anything that Hurd specifically did. Especially given how shakey HP's leadership in general has been in recent years.

Oracle's increase could be due to the fact that it did get a competitors CEO, with all the experience and insight into the HP strategy that his previous position brings.

And the case settlement may have been due to the fact that fighting the case may have ultimately been more costly than the settlement. Or, he may have been fighting a case that he couldn't win given the evidence and forced to pay out damages as well as legal fees.

There are certainly a lot of possibilities, and you can't necessarily make a solid determination on *exactly* why stock prices went up or down, or why someone settled instead of fought unless you sit down on an individual basis and ask.


RE: Happened Quickly
By sdsdv10 on 9/8/2010 3:44:34 PM , Rating: 3
quote:
Keep in mind Hurd made HP a lot of money in five years.


And the thousands of HP employees had nothing to do with it...

I'm sorry, I understand a CEO can make a difference but I truely believe their importance in overrated. In most cases CEO's just mess the place up, if they either stay mostly quiet or just help keep people focused on the job at hand that's good enough. In fact, the less the interfer the better.


RE: Happened Quickly
By Reclaimer77 on 9/8/2010 5:13:47 PM , Rating: 3
Sorry but CEO's often turn a company around. Why do you think they get paid so much and companies compete so fiercely for big name CEO's?

Or are we to believe that, coincidentally, the thousands of employees decided to work better or harder right when a new CEO is hired?

Back on topic, this is bad karma for HP. They fired him, gave him millions, then sent him on his way. But to file a lawsuit when he seeks work after the face? That's just wrong.

I believe everyone has a right to work or seek work. HP is in the wrong here.


RE: Happened Quickly
By sdsdv10 on 9/8/2010 6:22:30 PM , Rating: 2
quote:
Sorry but CEO's often turn a company around. Why do you think they get paid so much and companies compete so fiercely for big name CEO's?

Or are we to believe that, coincidentally, the thousands of employees decided to work better or harder right when a new CEO is hired?


Just a couple of things. First, pay has absolutely nothing to do with performance. Just look at HP, Carly Fiorina got a large paycheck, made a ton of money, was she good for HP? Bernie Ebbers, Dennis Kozlowski, Jeff Skilling, Jacques Nasser? The list goes on and on. A good portion of the CEO's either destroy a company or don't do it any good (i.e. Robert Nardelli at Home Depot and then off to make even more $$ at Chrylser before going bankrupt), yet they all make a great deal of money. I believe the majority of CEO's make a lot because people think CEO's should make a lot of money not for the actual difference they make. [One current exception is Alan Mulally at Ford.] Don't get me wrong, I'm not saying a good CEO isn't important to a company.

It's just that;
1) Their importance is generally overstated.
2) They make more money than they should.
3) Many have poor to outright terrible performance and make as much or more than the good ones. [Best example is a good CEO is Warren Buffet, his salary is modest as almost all his wealth comes from stock in a company he started. Heck, even he derides most CEO pay scales as excessive.]

Will this belief change anything... No, but a guy can hope can't he.


RE: Happened Quickly
By room200 on 9/8/2010 6:38:31 PM , Rating: 2
I agree 100%. Many of the same people claiming that CEO's deserve what they make are the same ones who deride athletes for what THEY make. Both are severely overpaid. The CEO moreso because when many of them "turn a company around", the only thing they end up doing is firing thousands of people and making the remaining ones work harder.

Also, the companies may pay for a big name not because of what he actually has accomplished, but it gets everyone all excited. Stocks surge temporarily; then reality sets in.


RE: Happened Quickly
By Reclaimer77 on 9/9/2010 3:39:03 PM , Rating: 1
There is no such thing as someone being "overpaid". And it's certainly not up to someone on the outside looking in to make that judgment.

Lot's of people bitch and moan about what athlete make. But you know who isn't bitching? The owners of the teams. Think about it :)


RE: Happened Quickly
By iwanttobehef on 9/9/2010 7:23:59 PM , Rating: 2
I bet you would sing a different tune if we talked about almost any union employee.


RE: Happened Quickly
By YashBudini on 9/22/2010 1:44:24 PM , Rating: 2
It really doesn't follow the usual pattern his kind have set, how people who lost their jobs were overpaid to begin with.

Except for CEOs of course.


"And boy have we patented it!" -- Steve Jobs, Macworld 2007














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