SAN FRANCISCO (AP) — The congressional panel investigating Hewlett-Packard Co.’s boardroom spying probe has demanded that Chief Executive Officer Mark Hurd explain $1.37 million worth of options he exercised just before the scandal became public, two lawmakers said yesterday.
Mr. Hurd’s cashout Aug. 25 — just before HP disclosed the spying tactics in a regulatory filing on Sept. 6 — did not appear to be part of a scheduled program, the panel’s ranking members, Rep. John D. Dingell, Michigan Democrat, and Rep. Bart Stupak, Michigan Democrat, said in a letter to Mr. Hurd on Tuesday.
The activity came on the same day Mr. 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 press, the letter stated.
Mr. Dingell and Mr. Stupak asked Mr. 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.
Mr. Hurd was given until Dec. 21 to comply with the request. He had testified before the House Energy and Commerce oversight and investigations subcommittee Sept. 28.
An HP representative was not 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.
Yesterday, HP shares slipped 16 cents to close at $39.67 on the New York Stock Exchange.
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