Looks like the dust up by shareholders over Hewlett Packard’s $40 million severance package to disgraced former CEO Mark Hurd may finally be dead. The shareholder derivative suit was dismissed September 25 but Judge Edward Davila gave them 30 days to refile an amended version. That day has come and gone. So Tuesday Davila issued an order telling plaintiffs he’s going to close the case Nov. 9 for “failure to prosecute” unless he hears otherwise.
The Teamster Union Local #142 and the Key West Police & Fire Pension fund, along with Louisiana Municipal Police Retirement System filed the suit against Hurd and individual HP board members.
Back in May 2010, HP discovered a former independent contractor at HP claimed Hurd sexually harassed her. Hurd was accused of condcealing his personal relationship with Jodie Fisher and making inaccurate expense reports intended to hide the relationship.
He resigned August 6, 2010 for a nice chunk of change. He got $12.2 million in cash, the right to exercise a lot of stock options and an additional 16,000 shares of company stock. It all came to about $40 million.
As if that wasn’t enough punishment for his alleged bad behavior, Oracle’s CEO Larry Ellison promptly offered Hurd the job of Oracle president.
HP sued in September claiming breach of contract. That was settled less than two weeks later with Hurd agreeing to forfeit rights to 346,000 HP shares.
The current lawsuit was brought by the pension groups, as shareholders, on behalf of the company claiming the board wasted company money and breached its duties by giving such a sweet exit deal to Hurd.
But Davila dismissed the suit saying they failed to show the exit package was “excessive.”
Case: In re HP Derivative Litigation, No. 10-cv-3608EJD