It didn't have to be this way. It was Hewlett-Packard's (HPQ -0.50%) own decision to oust ex-CEO Mark Hurd over a sexual harassment scandal back in 2010. Part of the juicy story entailed falsifying $20,000 in expense reports, which is completely meaningless from a monetary perspective relative to the shareholder value he created -- and how much has been destroyed since he left.
Rise and fall
Hurd's tenure as CEO from March 2005 to August 2010 saw shares more than double at one point, approaching 150% gains. By the time he left office, shareholders were 92% richer than when he started.
After leaving, HP is on its second CEO, Meg Whitman, after similarly booting Hurd's immediate successor Leo Apotheker. The cumulative results so far of Apotheker's and Whitman's efforts have not been as kind to investors.
One man did what he could to save HP and Hurd: Steve Jobs.
D&D
Even though Apple (AAPL 0.06%) has largely contributed to sluggish PC sales as it attracts users to the Mac and iPad, Jobs always had a deep respect for HP as an iconic giant that helped form Silicon Valley when he was young. In fact, Jobs' first job as a teenager was working for HP, so he's always had a certain respect for the company's legacy.
Shortly before his death, he aptly characterized what was happening to HP: It was "being dismembered and destroyed."
Walk it off
In a recent Bloomberg Businessweek article chronicling HP's fall from grace over the past couple years, there's an interesting episode where Jobs said he was there for Hurd if he wanted to chat. The whole ordeal struck close to home since he, too, had once been spurned by Apple's board over a decade prior.
Oracle (ORCL -1.13%) CEO and one of Jobs' closest friends Larry Ellison had called HP's move "the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago." Of course, actions speak louder than words and Oracle immediately snapped up Hurd posthaste; he's now Oracle's president and sits on the enterprise software giant's board.
Jobs was known for enjoying leisurely walks in the neighborhood, and him and Hurd took one such two-hour stroll shortly after Hurd resigned. Jobs reportedly wanted Hurd to "do whatever it took" to reconcile with the board and remain CEO. Jobs even offered to write a strongly worded letter to the board and call them individually if need be.
He idolized the innovation that Bill Hewlett and Dave Packard stood for during his formative years, and wanted to defend that legacy even if it meant helping a PC competitor that was looking to jump into the smartphone market with its purchase of Palm. Jobs felt that if HP was well, all would be good in Silicon Valley.
Some things aren't meant to be
Needless to say, Jobs was unsuccessful in his attempts to orchestrate a kiss-and-make-up between HP and Hurd. Since then, HP has had to recognize a cumulative total of $20.1 billion in goodwill and intangible asset impairments. However, two out of three of the related acquisitions, Palm and EDS, were actually made on Hurd's watch, even though the charges weren't recognized until after his departure. Hurd had nothing to do with the Autonomy deal, although it was shopped to him while at Oracle.
Going forward, Whitman is still in the midst of the mother of all turnarounds as HP tries to raise the bar with product design and find ways to get in on smartphone and tablet growth.
