Congress Demands Explanation From HP CEO
The congressional panel investigating Hewlett-Packard Co.'s boardroom spying probe has demanded that CEO Mark Hurd explain $1.37 million worth of options he exercised just before the scandal became public, two congressmen said Wednesday.
Hurd's cashout on Aug. 25 -- just before HP disclosed the spying tactics in a regulatory filing on Sept. 6 -- did not appear to be part of a prescheduled program, the panel's ranking members, John Dingell, D-Mich, and Bart Stupak, D-Mich., said in a letter to Hurd on Tuesday.
The activity also came on the same day Hurd was questioned by HP's outside attorneys who were investigating the circumstances surrounding the ill-fated effort to ferret out leaks by board members to the media, the letter stated.
Dingell and Stupak asked Hurd to explain whether the information regarding that transaction was accurate and the reason for the transaction.
"Continuing revelations about widespread "backdating" and "spring loading" abuses have raised questions about whether executives are cashing in ('bullet dodging') while in possession of potentially damaging material facts that shareholders do not know," the letter stated.
"Please state whether this is or is not the case with your transaction, and further please inform us whether any other HP officers or directors engaged in similar transactions during this period," it said.
He was given until Dec. 21 to comply with the request. He had testified before the Committee on Energy and Commerce's Subcommittee on Oversight and Investigations on Sept. 28.
An HP representative was not immediately available for comment.
HP's stock price has remained relatively buoyant throughout the scandal, though the uproar has led to a purging of its top ranks and felony charges against two ousted HP insiders -- former Chairwoman Patricia Dunn and former ethics chief Kevin Hunsaker -- and three outside investigators.
On Wednesday, HP shares were down 21 cents, to $39.62, in afternoon trading on the New York Stock Exchange.