Hewlett-Packard Co Chief Executive Mark Hurd resigned suddenly on Friday following an investigation of sexual harassment, the world's top computer maker said, stunning investors and sending shares down 10 percent.
Hurd, who has led HP since 2005, will be replaced by Chief Financial Officer Cathie Lesjak on an interim basis. Lesjak has taken herself out of consideration as the permanent CEO.
HP said an investigation into allegations of sexual harassment involving Hurd and a former HP contractor determined that there was no violation of HP's sexual harassment policy, but did find violations of HP's standards of business conduct.
HP said Hurd, who is 53 and married, had a close personal relationship with the contractor and had submitted inaccurate expense reports.
As the investigation progressed, I 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, Hurd said in a statement.
The buttoned-down Hurd has been credited with bringing a culture of discipline to HP and reviving the company's financial performance. He was one of the most widely admired CEOs in the technology sector.
News of the shake-up came as a shock.
Shock and puzzlement, that's how it's going to go down, said Russell Hancock, president and chief executive of Joint Venture Silicon Valley, an area business group. There wasn't anybody who criticized his handling of the company.
Mark Hurd was extremely instrumental in turning this company around, said Susquehanna Financial Group analyst Jeffrey Fidacaro. There's going to be a serious gap in leadership at the top of this company,
Shares of HP have more than doubled since Hurd, the former CEO of NCR Corp, took the helm five years ago, cutting costs and expanding HP's footprint in the services market with acquisitions like the 2008 purchase of EDS Corp for $13.9 billion.
HP said its board of directors has formed a search committee to find a new chief executive and board chair.
It's a negative because the positive leadership that HP has had under Hurd is identified with his name, said Nehal Chokshi, an analyst with Technology Insights Research-Southridge Research Group.
Shares of Palo Alto, California-based HP closed at $46.30 on the New York Stock Exchange and fell to $41.50 in extended trading.
(Reporting by Alexei Oreskovic; Additional reporting by Sinead Carew, Alex Dobuzinskis, Jim Christie, and Ritsuko Ando; Editing by Gary Hill)