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Nvidia co-founder Jensen Huang has given up defending himself, lost more than US$6 billion in wealth after Nvidia shares plunged, and will forfeit about US$108 million in unvested equity compensation, though the amount is only 0.08 percent of his US$138.4 billion fortune.
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Nvidia’s standard equity agreements stipulate that unvested restricted stock units (RSUs) are immediately forfeited upon the termination of an executive's continuous service, in which Huang holds about 346,000 RSUs. If Nvidia meets certain performance targets, he could have received about 310,000 performance-based shares.
97% Fortune Comes From Nvidia’s Common Shares
Unlike many other tech CEOs, Huang derives nearly all of his wealth from his Nvidia common shares, rather than stock options or cash salaries.
According to the Bloomberg Billionaires Index, his shareholding represents about 3.5 percent of Nvidia’s voting power because Nvidia operates on a single-class, one-share-one-vote structure, and the stake accounts for nearly 97 percent of his wealth. Huang has no special voting rights.
Over the past two years, his annual cash pay has been about US$7.5 million, which is insignificant compared with his enormous net worth.
But Huang has to bear a huge cost upon his resignation. Nvidia’s share price plunged as much as 14 percent intraday in the US, before narrowing the decline to close down 4.3 percent at US$166.19, wiping more than US$6 billion off Huang’s net worth.
Huang Gives Up Defending Himself
Bloomberg reported that Huang has been denying the extramarital affair with Alice Huang to secure his CEO role when the media revealed their close relationship in late October, and the board largely supported him, as many are his friends, business partners, and long-time investors.
But as soon as his second affair with Kimberly Powell on Wednesday, Nvidia’s vice president of health care, was revealed, the board immediately held a meeting till midnight and decided to ask Huang to resign.
People familiar with the matter said Huang looked broken and shattered, and he even said “whatever” or “I don’t care” during the meeting.
Bloomberg also cited a person who claimed to have talked to Huang recently that he was deeply remorseful about his conduct, even calling himself a "piece of sh--."
He said he no longer cared what happens to him at this point, and his foremost concern was his wife, and that he did not want to "ruin" the lives of the multiple women whom outside reports have linked to him romantically.
Bloomberg was unable to reach Huang for comment.
