SAN FRANCISCO—EDA and IP vendor Synopsys Inc. Wednesday (May 23) announced the promotion of longtime chief operating officer Chi-Foon Chan to the position of co-CEO, effective immediately.
With the promotion, Chan will formally share responsibility for managing the company with Aart de Geus, who co-founded Synopsys in 1986 and has been the company's sole CEO since 1992.
Synopsys said the promotion formally recognizes the contributions Chan has made in co-leading Synopsys for more than 10 years. The announcement of Chan's promotion corresponded with Synopsys latest quarterly financial report, in which the company posted sales and gave guidance which beat consensus analysts' expectations (more on the results below).
In an interview with EE Times following the quarterly report and Chan announcement, de Geus said promoting Chan to co-CEO would not be a major change in the structure of Synopsys. "It's not a structure that many companies adopt," he said. "For us, it's not a big change because Chi-Foon and I have been working hand and glove for over a decade."
De Geus said the promotion was prompted in part by Synopsys' growth in sales, product lines and geographic diversity. He described a collaborative relationship with Chan and said the company ultimately benefited from each man's point of view and their ability to work through decisions together.
Asked if the structural change meant he was laying the groundwork for his retirement, de Geus said "just the opposite" is true and that the promotion would configure Synopsys at the top for its next phase of growth.
"It is not a change in status or planning of change of status for me," de Geus said in a conference call with analysts following Synopsys' quarterly report. "On the contrary, it is actually both a recognition and a highlighting of what has been a fabulously good working relationship. But even better than that, I think, it is also the signing up for now really working on the next phase of growth for the company."
Rich Valera, an analyst with Needham and Co., said the structural change is unlikely to have any major impact on Synopsys in the short term. He said he expected that Chan would continue to largely oversee the day-to-day operations of Synopsys, as he has done for years, while de Geus remained focused on longer term strategy. "I don't think there is going to be an issue here," Valera said.
In the longer term, Valera said, the move paves the way for Chan to eventually take over for de Geus as the CEO of Synopsys, with de Geus likely retaining his role as chairman of the company's board of directors. But Valera said such a transition is likely years away and that he could only speculate on how many.
Asked if he thought the move could have been prompted by Chan receiving an attractive job offer, Valera said it was a plausible scenario, but pure speculation. Chan may have "wanted a signal from the board" that he was in line to take over as CEO, Valera said, again stressing that this was only speculation.
Chan joined Synopsys in 1990 as vice president of applications and services from NEC Corp. USA, where he was general manager of the microprocessor group. Over the years, he pioneered many aspects of the company including the initiation of Synopsys' IP business, Synopsys said. He was appointed president and chief operating officer in 1998, at which time he also joined the Synopsys board of directors, the company said.
"I am excited about addressing the opportunities that we see ahead for our company," Chan said, in a statement.
@goafrit- I'll agree with you that the two CEO thing has had checkered results in the past. But I don't see a transition to Chi-Foon as sole CEO that quickly. I'll take Aart at his word that he's not planning on going anywhere right now. I'll cast my lot with analyst Rich Valera, who said that this move paves the way for Chi-Foon to be the sole CEO, but not for quite some time. It's not like Aart is on the outs with the board (of which he is chair) or the investors, and it's not like there is likely to be some kind of power struggle between the two men.
I read this as a formalization of a succession plan that was already basically in place. And I wouldn't be surprised if what prompted them to go with co-CEO route now is that Chi-Foon was drawing interest from another company or companies about a CEO job.
Congrats Chi-Foo. This is the move to become the sole CEO within the next 2 quarters. This co-CEO does not work. It failed in BlackBerry, Goldman Sachs and I am sure it will not be long Chi-Foo takes over.
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