SAN FRANCISCO -- Dave Bell fell on his sword this week at
long-suffering Intersil, resigning his post as CEO with the sound of
impatient Wall Street fingers tapping incessantly in the distance.
One Wall Street firm, Deutsche Bank, opined, "While we appreciate
the strategic changes Mr. Bell attempted at ISIL, we believe the
transformation of the company was simply taking too long and was too
punitive financially to revenue growth and profitability.
Consequently, we view this change as being necessary and a positive
as hopefully it reflects a sense of urgency at the Board level to
improve upon such metrics/execution."
It's a rare blotch on the career of a guy well respected in the
analog community, who joined Intersil after a fine dozen years with
But the situation raises a question we don't often grapple with in
our industry: Do we hold our boards of directors accountable enough?
Or conversely, do our CEOs tend to pack their boards with "their own
guys" to insulate themselves from harm? (Longtime Silicon Valley
engineers are right now flashing on Al Stein at VLSI Technology).
Let's look at the case at hand: Bell became Intersil CEO on Feb. 13,
2008, and had been president and COO before that. Of the nine
Intersil board members listed today, eight of them predate Bell's
arrival. Five of the seven have served on the board for
at least 10 years. Intersil stock has underperformed competitors
since 2008, and even before that was in the middle of the pack.
If you look at the last four years, fingers could clearly
point at Bell's leadership.
"I think that Intersil had been overextended for quite some time,"
said Steve Ohr, an analog semiconductor analyst with Gartner Group.
"Dave Bell had visions of making Intersil a billion-dollar company,
with acquisitions as well as organic growth. But if you buy another
company or another business, you want it to be accretive on Day One,
not next year or the year after that. Dave wound up fighting wars on
too many fronts."
Dave Bell did not have the company on the right track. He purchased too many "loser" companies. The Board finally figured it out. 3/4 of the companies were an op-ex drag and destined to stay that way for years to come. Hype doesn't pay the bills.
I have to agree with previous posts pointing to the fact that Dave Bell is an outstandig leader and his work at Intersil was a challenging endeavor. I generally feel that Wall St pressure on BOD's is causing a lot of problems for companies like Intersil that want to move into new growth markets. The change expectations are too high and the time allowed is too short. Look around the the valley at numerous companies that are fully capable of moving into a new markets but are now allowed because of short sighted boards. My opinion is that Dave Bell had the company on the right track but the time required was too short.
Absolutely right, but I'm not sure whether the answer is more "outsiders"... at the end of the day, it's a deeply technical industry that needs technical leadership... and maybe more vigilant investors....?
No insights, but given that Maxim seems more open to acquisition and Linear just made its first-ever acquisition (Dust Networks) last year, the possibility is definitely there.
Or a big digital player in need of analog expertise might consider it.
Or conversely, do our CEOs tend to pack their boards with "their own guys"
it is circular - ceo's from one company are the board members of another and vise versa. Then you just have a mesh of back scratching....
If TI is dominating power, then please explain how Dialog has grown from $85 Million in 2005 to $750 Million in 2012. Everyone in power semiconductors is flat to down for the past several years. Those guys from Stuttgart are growing at 28%!
[Answer: Apple thinks Dialog power is good enough. 25,000 patents and the world leadership of TI doesn't count. That was my point about why high volume, high margin power semiconductors are old-hat. It's over. Time to move on to move valuable products.]