PMC-Sierra has demoted its chief financial officer.
The semiconductor maker, one of at least 100 companies under investigation for options backdating, said Alan Krock will no longer serve as CFO. He will “transition into the role” of vice president of corporate affairs, according to a regulatory filing.
Krock will officially stop serving as finance chief either when the company files its 2006 annual report with the Securities and Exchange Commission or appoints a new CFO or interim CFO, or March 15, 2007, whichever comes first.
The company did not provide a reason for the job change or what his new tasks will entail. Prompted by a request for comment, a company spokeswoman referred CFO.com to the regulatory filing and said Krock has not yet transitioned to his new role.
The announcement is more specific than a previous regulatory filing, when the company had said Krock would continue to serve as CFO until the company has appointed a new CFO or an interim CFO, “after which the company may change” Krock’s position and duties.
In its most recent quarterly report filed earlier this month, the company acknowledged that the SEC launched an informal inquiry into its stock-option granting processes in August. At the time, PMC-Sierra reported that its audit committee concluded that the accounting measurement dates for certain stock option grants awarded primarily from 1998 through 2001 differ from the measurement dates previously used to determine any stock-based compensation expense for those years. PMC-Sierra stressed, however, that those errors were not the product of deliberate misconduct by executives, staff, or members of its board of directors.
Before joining PMC-Sierra, Krock was the vice president and CFO at Integrated Device Technology, where he also held the title of vice president and corporate controller. He joined IDT after working as corporate controller for RohmUSA and a senior manager at PricewaterhouseCoopers.
Once Krock ceases to serve as CFO at PMC-Sierra, he may be entitled to a minimum quarterly bonus of $40,000 for the fourth quarter of 2006 and the first quarter of 2007, depending on whether he holds the title during that time. He will also continue to receive his $265,000 salary.
The company also noted that under his new employment agreement, if he is still with the company after a new—or interim—CFO is appointed, Krock will work from his home office. In addition, he will no longer be eligible to participate in the company’s Short Term Incentive Plan (STIP) or Evergreen Stock Option Grants, or to receive any other bonuses or additional stock option grants.