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Stock options backdating continued to roil the technology sector on Tuesday as KLA-Tencor, a semiconductor equipment maker, announced the resignation of Kenneth Levy, its founder, chairman and two-time chief executive.
KLA said on Monday that it had fired Kenneth Schroeder, a board member and former chief executive, and had accepted the resignation of Stuart Nichols, its general counse
The departures added to the turmoil that has gripped the sector this week amid a flurry of high-level resignations and firings.
Shares in KLA fell 2.6 per cent after the company said it could be forced to take a charge of up to $400m to account for improperly awarded options grants.
Edward Barnholt, a KLA director and former chief executive of Agilent, a rival chip company, was appointed chairman. Mr Barnholt said KLA would name Mr Levy “chairman emeritus” in recognition of his contributions to the company.
Top executives and board members at more than a dozen companies have lost their jobs as a result of backdating, an apparently widespread practice in which the value of an options grant is inflated by changing its grant data to coincide with a low point in a company’s share price.
The reshuffle at KLA followed the resignation earlier this week of William McGuire, the chief executive of United Health, the US healthcare group, who was widely regarded as one of the top performing US chief executives. Last week, top executives at McAfee, the anti-virus software group, and CNET, an online publisher, also resigned over backdating.
More than 100 companies suspected of options backdating have come under investigation by federal authorities, who are examining whether executives misled shareholders and regulators about options grant dates.
Former executives at two companies, Brocade Communications Systems and Comverse Technology, face charges of securities fraud for their alleged roles in backdating schemes.