Microsemi CEO Misrepresented Degrees
The board of US chip and circuit manufacturer Microsemi Corporation has fined chief executive officer Jim Peterson for saying he held degrees that he did not.
Peterson claimed to hold a Bachelor s Degree and Master s of Business Administration from Brigham Young University.
On January 29 the company announced that an independent inquiry has found that he only held an Associate s Degree, but had studied towards a Bachelor s at BYU.
Consequently Peterson, who has been Microsemi CEO since December 2000, must immediately pay his employer $100,000 dollars and forego his annual bonus, which has averaged $680,000 over the past three years.
The various dates on which the CEO was set to be awarded a total of 323,000 Microsemi shares have also all been delayed by one year. At the close of trading on January 29, those shares were worth $8.41 each.
“The board concluded that the interests of Microsemi s shareholders are best served by retaining Mr. Peterson," commented Microsemi s chairman, Dennis Leibel. “The decision [to fine Peterson] sends a clear message: We will ensure that every employee and director complies with our code of ethics."
Microsemi will now conduct background checks on 16 more of its executives after the affair, which began in December after investigations by Barry Minkow of the Fraud Discovery Institute.
His accusation that Peterson misrepresented his degrees was reported by Bloomberg and SeekingAlpha, forcing a response from Microsemi.
On December 3, 2008, the company issued a statement in which Peterson said, “I have every reason to expect that Brigham Young will officially confirm my degrees.“
Irrespective of the controversy over his qualifications, Peterson steered Microsemi to a recession-bucking year-over-year increase in revenue and profit in the last three months of 2008.
Those results, announced just a week before Peterson's punishment, owed a great deal to the company's product lines for defense electronics, which include SiC components.
“In the future we expect to succeed in the defense market as a result of our scale, quality of manufacturing, acquisitions and development of products such as our new radiation-hardened offerings and our award-winning SiC devices," Peterson told analysts at the time.
This kind of business performance appears to have been pivotal in the board s decision to keep Peterson in place, regardless of any wrongdoing.
“Despite the results of the inquiry, we recognize that Jim Peterson has built a highly successful and profitable enterprise at Microsemi during the past nine years, with a strong business plan and vision for the future," Leibel said.