Nvidia's board met last night (Wednesday) in a session that ran late into the night to discuss ousting CEO and founder Jensen Huang. As of midday Israel time, the company had not announced a decision, and according to TheNextWeb no outcome had been reported by morning in Europe either. Meanwhile, the company continues to operate as usual, and Huang is still CEO.
What can the board do?
Under Nvidia's bylaws, a majority of the 11 board members is enough to remove the CEO 'with or without cause.' It is important to understand: removal as CEO does not take Huang off the board. He would remain a director and the holder of about 3.6% of the company, unless he chooses to leave or shareholders decide otherwise at a meeting.
What led here?
The board opened an investigation on November 8, after Huang admitted to a relationship with Alice Huang, a former senior figure at Singapore's Megaspeed whom US intelligence officials suspect of working for China. On Tuesday, The New York Times reported another relationship, with an Nvidia vice president who reports directly to him, and according to The Wall Street Journal the board was preparing to oust him.
What next?
The stock fell more than 8% in after-hours trading yesterday, and investors will watch every announcement today. As long as the board does not decide, the uncertainty itself hurts the company: customers, partners and employees do not know who will lead it in the week it is due to report quarterly results, on November 17. Techwire will update as soon as a decision is published.
