Nvidia board can remove CEO Jensen Huang without a criminal conviction, report says

Nvidia's board can remove CEO Jensen Huang from his executive role through a majority vote of directors, but removing him as a board director requires shareholder approval. The report comes amid an investigation into allegations of a foreign intelligence operation targeting him.

New Delhi: Nvidia’s board has the authority to remove founder and Chief Executive Officer Jensen Huang from his executive role through a majority vote of directors in office without a criminal finding or conviction, although removing him as a board director would require shareholder approval under separate procedures, according to a report.

The report from NDTV Profit said Nvidia’s amended and restated bylaws, dated March 12, 2024, allow any company officer to be removed with or without cause through the affirmative vote of a majority of directors.

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Nvidia’s bylaws provide for director removal with cause through a majority shareholder vote. Director removal without providing a cause requires a shareholder vote representing at least 66.67 per cent of the company’s outstanding voting power.

Nvidia has launched an independent investigation on November 8 into reports that Huang was targeted by a spy of a foreign intelligence operation purportedly through a personal relationship.

The inquiry follows allegations involving Alice Huang, an executive at Singapore-based Megaspeed, a major Nvidia customer that reportedly purchased more than $4.8 billion worth of Nvidia chips over two years.

US-based companies have removed chief executives over personal relationships that have violated internal policies multiple times. McDonald fired CEO Steve Easterbrook in 2019 after finding that a consensual relationship with an employee violated its standards of business conduct.

Intel CEO Brian Krzanich resigned in 2018 after the company found that a past consensual relationship with an employee breached its non-fraternisation policy.

US policymakers claim that the women in question had been recruited by China’s Ministry of State Security to spy on NVIDIA’s CEO. Huang sent an email to NVIDIA employees, owing his family and “all of you an apology”.

China on Monday dismissed claims that it had spied on Jensen Huang, chief executive of US chip giant Nvidia, calling such claims “baseless,” according to media reports from Beijing.

Singapore-based AI data centre company Megaspeed, for which the alleged Chinese spy worked, also denied allegations that it was involved in illegally shipping Nvidia chips to China, saying inspections by US and Malaysian authorities, as well as Nvidia, found no evidence of wrongdoing.