Nvidia CEO Jensen Huang could be at risk of losing his top position at the company, as reports suggest that the board of directors may discuss removing him. This comes amid growing controversy over his alleged personal relationships, including claims of an affair with a Chinese businesswoman suspected of having links to Chinese intelligence.
Nvidia is currently the world's leading maker of artificial intelligence (AI) chips.
According to The New York Times, six of the company's 11 directors can vote to remove Huang, either with or without giving a reason. A new CEO would take charge of a company that supplies an estimated 90 per cent of the chips used in major AI projects.
How Can Nvidia's Board Remove CEO Jensen Huang?
Nvidia's rules allow its board of directors to remove any company officer through a majority vote, with or without giving a reason.
Since the company has 11 board members, at least six votes would be needed to remove Huang. The directors can also make this decision without holding a meeting if all members sign a written agreement. Any two directors can also call a special meeting by giving 24 hours' notice.
Huang currently holds two positions at Nvidia- president and CEO. Under the company's rules, the president also serves as the CEO unless the board appoints someone else. This means the board would have to remove him from both positions.
Nvidia's code of conduct also lists personal relationships as a possible reason for a conflict of interest. The company's policy states: "We promptly investigate reports of misconduct."
According to The New York Times, many companies have rules against managers having personal relationships with employees who work directly under them.
Can Jensen Huang Also Be Removed From Nvidia's Board?
Removing Huang as CEO and removing him from the board of directors are two different processes.
If the company or its shareholders want to remove him as a board member, separate voting rules would apply:
- Removal with cause: A majority vote by shareholders would be required.
- Removal without cause: Shareholders holding at least 66.67 per cent (two-thirds) of the company's total voting power would need to approve the decision.
Huang owns around 3.56 per cent of Nvidia's shares, which is not enough to block a shareholder vote.
However, he would generally remain on the board unless he resigns or shareholders vote to remove him.
What Is Nvidia CEO Jensen Huang Controversy?
The controversy surrounding Huang involves separate reports about his alleged relationships with two women.
The New York Times reported that Huang was allegedly involved with Kimberly Powell, Nvidia's vice president of healthcare, who reportedly worked under him. The newspaper cited five former employees who claimed to know about the relationship.
The report also claimed that Huang and Powell were seen behaving affectionately at a hotel during Nvidia's GTC developer conference in San Jose in March.
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The controversy gained further attention on Monday after Huang admitted that he had been unfaithful to his wife and apologised to his family and employees.
His statement came as Nvidia launched an independent investigation into reports linking him to Alice Huang, a Chinese businesswoman suspected by US intelligence agencies of working for Beijing.
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According to an email sent to Nvidia employees, Huang accepted responsibility for his actions and admitted that he had hurt his wife and children. He also expressed regret and said there was no excuse for his behaviour.