Broadcom's CFO Resigns Citing Stock Options Scandal
By Colleen Taylor -- EDN, September 20, 2006
In the latest fallout from the ongoing stock options scandal, William Ruehle, Broadcom Corp.'s senior VP and CFO, has decided to retire, effective immediately.
Broadcom's board of directors has named Bruce Kiddoo, the company's VP and corporate controller, to serve as acting CFO on an interim basis. Kiddoo is a "serious contender" for permanently filling the CFO position, Broadcom's CEO Scott McClellan said in a statement after the bell on Tuesday.
Ruehle, 64, has served as Broadcom's CFO since June 1997 and decided to “accelerate his retirement” as a result of Broadcom's ongoing equity award review.
Broadcom has been under fire for its stock option granting practices for months.In May, Merrill Lynch identified Broadcom as one of six companies that had displayed suspicious stock option grants and pricing, and Broadcom launched its own internal review. The Securities and Exchange Commission (SEC) then launched a probe into the company in June.
Due to the continuing review, the company delayed a regulatory filing to the SEC by deadline in August, prompting criticism and a threat of delisting from the Nasdaq stock market. Earlier this month, Broadcom disclosed that the committee conducting its internal review has determined the company will need to record at least $1.5 billion in non-cash stock-based compensation expenses.
"Because the equity award review is ongoing and confidential, the company will not make further public comment at this time about the review or Mr. Ruehle's decision to retire," the company said in a statement.
Ruehle is not the first executive casualty of the industry-wide stock options controversy. Execs at Semtech, Rambus, SteelCloud and Vitesse have all stepped down or been dismissed from their posts due to allegations of stock options fraud. And while Atmel officially ousted its CEO and three other execs in August over the "misuse of travel funds," the company has also received increased attention to its stock options granting practices with the move.
