Marvell Technology Committee Wants CEO to Step Down as Chair
A special committee investigating stock option grants at Marvell Technology Group has called on Chief Executive Sehat Sutardja to step down as chairman, the company said on Monday.
Marvell, which is also under investigation by U.S. securities regulators, said the special committee's recommendation came as it closed a review that found the company had used incorrect dating on some stock option grants.
The company's shares rose 74 cents, or 4.2%, to $18.34.
The committee determined that there were a number of occasions that grant dates were chosen "with the benefit of hindsight as to the price of the company's stock, so as to provide exercise prices lower than the fair market value on the actual measurement date."
While the committee found that Sutardja "participated in only a few instances in grants with incorrect measurement dates," it nonetheless said he should step down as chairman. It added, however, that he should remain CEO and a member of the board.
But the company, which makes microchips for hard-disk drives, said Chief Financial Officer George Hervey had resigned. Mike Tate, the controller and treasurer, will serve as interim CFO, it said.
Marvel has said it will restate some results to account for additional noncash charges for stock-based compensation. While it has not made a final determination on the amount of the charge, it currently plans to record cumulative, pretax, noncash expense adjustments ranging from $325 million to $350 million for periods through fiscal 2006.