Qualcomm Replaces Chairman Jacobs With Independent Henderson
(Bloomberg) -- Qualcomm Inc. said Paul Jacobs will no longer serve as executive chairman of the board, downgrading the role of a man who’s been central to its fight to stave off a hostile takeover bid by Broadcom Inc.
The company is discontinuing that role in favor of an independent chairman position, which it’s giving to Jeffrey W. Henderson, who has been a board member since 2016, Qualcomm said in a statement Friday.
By reducing Jacobs, former chief executive officer and son of the company co-founder, to equal status with other members of the board, Qualcomm may be signaling that oversight of the company is going to become more independent as it considers Broadcom’s $117 billion offer. It’s received criticism from shareholders and initial voting patterns in a proxy fight indicated they want changes among board members who have sided with management in shunning the proposal.
The move shouldn’t be construed as a major change, however, because Jacobs had already been slowing down his involvement in the company ever since giving up the CEO role to Steve Mollenkopf in 2014, Christopher Rolland, an analyst with Susquehanna Investment Group, said in an interview.
Still, it was probably one of the last things Qualcomm could have done to appease shareholders. “Going forward, it’s going to be pretty hard to find any new angles between now and the general meeting,” he said.
Qualcomm rose 1.7 percent to $62.84 at 11:15 a.m. in New York.
Broadcom’s attempt to take majority control of Qualcomm’s board is on hold pending a U.S. government investigation on security concerns. Shareholders are scheduled to get the chance to vote on Broadcom’s nominees in early April. With more than 50 percent of votes cast leading up to a meeting earlier this week that was postponed by the government, Broadcom was on course to have its directors seated and replace more than half of the group that has opposed it.
“The board is committed to the principles of strong corporate governance and believes that having an independent director as chairman at this important juncture in Qualcomm’s history is in the best interest of the company and our stockholders,” lead independent director Tom Horton said in the statement.
Qualcomm is removing the position of executive chairman but Jacobs, 55, will continue to serve on the board. Representatives for Qualcomm didn’t immediately return messages left seeking comment
So far, two brief meetings between Qualcomm representatives and its suitor have ended in acrimony and the sides have resorted to bitter accusations of deception and lack of commitment to getting a deal done.
Qualcomm’s position is that the $79-a-share offer is an attempt to steal the company on the cheap and the takeover has little chance of getting the regulatory approval it would need in a timely manner. Broadcom CEO Hock Tan has argued that his team’s track record, compared with that of Qualcomm’s management, shows that he would run a combination more effectively.
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