Texas Instruments CEO quits over conduct violations

Brian Crutcher is third leader in less than two months to leave a chip firm over rule breaches

SAN FRANCSCO • Texas Instruments said its chief executive officer Brian Crutcher resigned after less than two months in the job, citing violations of the chipmaker's code of conduct.

His predecessor, chairman Rich Templeton, will resume the role on a permanent basis. "The violations are related to personal behaviour that is not consistent with our ethics and core values, but not related to company strategy, operations or financial reporting," the company said on Tuesday in a statement without elaborating.

Shares of Dallas-based Texas Instruments fell 2.3 per cent in extended trading.

Mr Crutcher is the third chip company leader in less than two months to leave his job over a breach of rules on personal conduct, following the departures of Intel's and Rambus' CEOs. Intel's Brian Krzanich was found to have had an extramarital relationship with an employee.

Those resignations, as well as the broader backdrop of the #metoo movement focused on eradicating gender-based discrimination, harassment and abuse, may be triggering heightened scrutiny of the personal behaviour of tech-industry executives.

"It's quite surprising - TI (Texas Instruments) has always been so by the book and their executives have always been so well trained," said Mr Tore Svanberg, an analyst at Stifel Nicolaus & Co. "Boards are definitely under pressure to do what's right ethically."

The board acted after receiving a report on Mr Crutcher's behaviour, Mr Templeton said in an internal video address to employees.

A company spokesman declined to comment on the nature of the violation and whether it was related to a personal relationship.

By acting to remove him, directors were forced to go back on their earlier ringing endorsement.

"The directors have had a number of years to assess Brian's ability, results and style, and we are highly confident he is TI's next great leader," Mr Wayne Sanders, lead director of the board and chairman of the governance and stockholder relations committee, said in a January statement when Mr Crutcher was named as the next CEO.

Mr Templeton, 59, returns to the helm of a company he led for more than 13 years, during which he transformed Texas Instruments into the leading provider of analogue chips and made it one of the most profitable companies in the industry.

Mr Crutcher's promotion to president and CEO to replace Mr Templeton was announced six months ago. He just took the reins on June 1.

Both executives have spent more than 20 years at Texas Instruments.

Mr Crutcher also resigned from the board.

Mr Templeton will most likely stay in his post until the company has identified his successor from within its ranks and trained that person, a path it typically follows, according to Mr Svanberg.

For Mr Crutcher, as for his counterpart at Intel, an involuntary exit is going to be expensive. He could be forced to surrender as much as US$43.3 million (S$59.3 million) in stock awards, according to data compiled by Bloomberg.

At least 437 high-profile executives and employees had been accused of harassment or other misconduct as the #metoo movement has increased scrutiny of all executive behaviour over the last 18 months, according to a tally updated daily by crisis-consulting firm Temin & Co. Of those, 259 were fired or left their jobs, the study found.

"Pandora's box has been opened and there's no putting the lid back on," said Mr Davia Temin, founder and CEO of Temin & Co.

"There's been a lot of bad behaviour, for a long time, and in the past it's often been walled off or dealt with privately. But now scrutiny has been unleashed."

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 19, 2018, with the headline 'Texas Instruments CEO quits over conduct violations'. Print Edition | Subscribe