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Broadcom CFO Leaves Amid Options Probe

William Ruehle cites audit committee's "equity award review" as contributing to his early retirement.
Stephen TaubSeptember 20, 2006

William Ruehle, senior vice president and chief financial officer of Broadcom has retired, effective immediately, according to a company announcement issued on Tuesday.

The maker of semiconductors for the telecom market said that the 64 year-old decided to accelerate his retirement “as a result of Broadcom’s previously-announced equity award review.” Broadcom spokesman William Blanning said Reuhle was not available for comment. However Blanning reiterated that the retirement was Ruehle’s decision. “He took the initiative. He believes this decision is in the best interest of Broadcom and its shareholders,” said Blanning.

Blanning also said no further details about the audit committee’s findings were available becasue the review is continuing and no conclusions have been reached. However, Banning did say that the company is trying to finish the review process as “expeditiously as possible.” The review, which is being conducted by the company’s audit committee with the help of outside counsel, began in May.

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Earlier this month, Broadcom said it identified additional stock-option grants for which the measurement dates differ from those originally used to record such awards, which will cause additional noncash, stock-based compensation expense to be “at least twice the amount” previously estimated and could be substantially more, depending upon the resolution of certain accounting issues. Broadcom officials also said the company will restate financial results for more than six years, and take a $750 million charge to correct improperly recorded stock options.

Scott McGregor, Broadcom president and chief executive officer, said the company is launching a global search for a new CFO. Controller Bruce Kiddoo was tapped to serve as acting CFO on an interim basis. McGregor said Kiddoo will be seriously considered for the permanent CFO position.

Kiddoo joined Broadcom in 1999 as controller of the Broadband Communications Business Unit and became the company’s corporate controller and principal accounting officer in July 2002. In January 2003, he was elected a vice president.

Ruehle served as Broadcom’s CFO since June 1997. During his tenure, Broadcom grew from $37 million in revenue and about 200 employees in 1997, to over $2.5 billion in annual revenue and nearly 5,000 employee, reported the company. As of June 30, 2006 the company had no debt and held over $2.37 billion in cash, cash equivalents and marketable securities.