IR Announces Internal Reforms In Conjunction With Resignation Of Lidow
International Rectifier Corp. (IR) announced the resignation of Dr. Alex Lidow as CEO and as a Director, effective immediately. Don Dancer continues as IR’s acting CEO, a position he has occupied since August 28, 2007. The Board of Directors has engaged Korn/Ferry International to conduct a search for Lidow’s permanent replacement. The search is being led by Dr. James Plummer, Chairman of the Corporate Governance and Nominating Committee.
Dancer commented, "We want to thank Alex for his contributions to the company. During his tenure, he led the pioneering power MOSFET technology, which drove the adoption of power management across broader end use applications. His focus on power management helped to solidify International Rectifier as a leader in the industry. Alex has also encouraged the next generation of technology professionals who will continue to create and provide our customers with innovative products."
"I have appreciated the opportunity to serve International Rectifier as a Director and CEO the last 12 years," said Lidow. "International Rectifier and the power management industry have a bright future, and I believe the company will continue to deliver enormous value to the companies it serves and end-users by helping to reduce global energy consumption and improving energy efficiency."
Lidow will receive accrued salary, bonus and vacation through the date of his departure. He will be entitled to exercise his vested options for an additional eighteen months, or 90 days following the date on which the company becomes current in its SEC financial reports, whichever is later. The company has agreed to vest all of Lidow’s options that had not already vested.
IR also announced initiatives in relation to the accounting irregularities that led to Lidow’s departure. The company has shifted reporting of the internal audit function to the Audit Committee of the board of directors and the general counsel, and appointed a lead independent director, as well as a Special Committee of the board to advise and support the acting CEO. The company is evaluating independent third party consulting firms to document and assess the design effectiveness of processes and controls, as well as revamping its hotline process and placing it under the internal audit function. IR has also changed the reporting relationships at its Japan subsidiary to improve oversight of the subsidiary, and added interim processes to help assure adherence to proper revenue recognition policies at the Japan subsidiary. The company states that it expects to continue to assess and improve its internal controls and corporate governance environment.
Jack Vance, IR’s lead Independent Director, said, "During this period of transition for the company, the Audit Committee and I are working diligently to bring the internal accounting investigation to a resolution. We are also taking steps to implement meaningful changes to our internal controls and governance policies. Going forward, we will continue to work with Don Dancer, International Rectifier’s acting chief executive officer, as well as our executive leadership team and our employees to help ensure that our company continues to create the products and deliver the level of service our customers have come to expect of International Rectifier."
