Maxim Integrated Products named Bruce Kiddoo vice president of finance. He will assume the chief financial officer title following the completion of the Maxim’s restatement.
The manufacturer of analog and mixed-signal integrated circuits, which has a market capitalization of $10 billion, disclosed that it will restate financial results for fiscal years 2000 through 2005, and quarterly periods through March 25, 2006. The adjustments will reflect material differences related to accounting measurement dates for stock option grants that differ from the historical grant dates.
Kiddoo was previously the vice president and corporate controller and principal accounting officer for Broadcom Corp., where he was responsible for all business unit finance, corporate financial planning and analysis, worldwide accounting and SEC reporting. From September 2006 through March 2007, Kiddoo served as Broadcom’s acting CFO, and is credited with successfully completing the company’s restatement.
Kiddoo replaces Alan Hale, who assumed the CFO role on an interim basis in late January, after Maxim’s chief financial officer Carl Jasper resigned. In December, Maxim’s strategic advisor and former Chief Executive Officer John F. Gifford retired, citing health reasons. Both departures were announced after a special committee of Maxim’s board found deficiencies related to the process for granting stock options to employees and directors.
Kiddoo took over the CFO role at Broadcom after William Ruehle abruptly announced he would accelerate his retirement “as a result of Broadcom’s previously-announced equity award review.” At that time, the semiconductor maker, which had been investigating the possibility of backdating since May 2006, said it had identified additional stock-option grants whose measurement dates differed from those originally used to record them.
Broadcom warned that the differences would cause additional noncash, stock-based compensation expenses to be “at least twice the amount” previously estimated and could be substantially more, depending on how it would resolve certain accounting issues. Broadcom officials also said the company would restate financial results for more than six years, and take a $750 million charge to correct improperly recorded stock options.
Three months later—in December 2006—Broadcom announced that it had discovered that a number of executives and employees deliberately backdated stock option grants over a period of four and a half years. It also said it would cancel some $37 million worth of outstanding unexercised options held by three of those people.
Officials at Broadcom added that all of the individuals responsible for backdating grants had either previously left the company for reasons unrelated to the options investigation, or had recently departed as a result. Specifically, Broadcom noted that its audit committee “reaffirmed its full faith and confidence in the integrity” of president and CEO Scott McGregor and acting CFO Bruce Kiddoo. “The committee further concluded that both Mr. McGregor and Mr. Kiddoo can appropriately serve as officers certifying Broadcom’s financial statements,” it added.
Several weeks ago, Broadcom said that the Securities and Exchange Commission may charge both the company and its chairman in connection with an SEC investigation into its stock-option granting practices and related accounting issues. In a regulatory filing, officials commented that the company, and its co-founder, chairman and chief technical officer, Henry Samueli, received Wells notices from the SEC indicating that the regulator intends to recommend a civil action for possible violations of securities laws.
In May, Broadcom disclosed that it had produced documents in response to grand jury subpoenas. Broadcom also stated that the U.S. Attorney’s Office for the Central District of California has begun to interview current and former employees. The company pledged to cooperate with the investigation.