It’s déjà vu at Hewlett-Packard Co. (HP).
Just three months ago, the computer maker’s board of directors breathed a sigh of relief when a Delaware Chancery Court judge tossed a shareholder lawsuit claiming they wasted company money by agreeing to pay former CEO Mark Hurd $12.2 million in severance pay and nearly $35 million in vested stock.
Now another judge has tossed a similar but separate shareholder suit against Hurd and a group of HP directors in which the plaintiffs claimed the ex-CEO’s payout was excessive and that the company didn’t benefit from approving the payment.
Hurd, who currently is president at software maker Oracle Corp., resigned from his position as CEO of HP in August 2010 amid allegations that he sexually harassed Jodie Fisher, an HP marketing consultant and former reality TV star. Although HP determined that Hurd didn’t violate its corporate sexual harassment policy, the company did find that he had falsified expense reports amounting to nearly $20,000 in an attempt to hide his relationship with Fisher.
The judge who tossed the shareholder suit in June wrote that HP’s directors acted in good faith in approving Hurd’s payout, even though the amount “may appear extremely rich or altogether distasteful to some.”
And yesterday, U.S. District Judge Edward Davila of San Jose, Calif., ruled similarly, finding that the plaintiffs failed to show that the board’s approval of Hurd’s payout wasn’t “a valid exercise of business judgment” in HP’s best interest.
Judge Davila gave the plaintiffs 30 days to file an amended complaint. Bloomberg Businessweek reports that the plaintiffs are demanding that Hurd disgorge to the company the payout he received upon his resignation.
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