Cirrus Logic: CEO Resigns Over Options Backdating

The options backdating scandal has claimed another tech executive. Cirrus Logic (CRUS) late Wednesday announced the resignation of David French as CEO, President and a director. Chairman and former CEO Michael Hackworth will take over from French on an interim basis.

The company said it will have to take a non-cash charge of $22 million to $24 million for additional compensation expense. Cirrus said French was “significantly involved” in the approval process for “certain grants.”

Does the Street care? Not really.

Jay Srivatsa, an analyst with Roth Capital, yesterday repeated his Buy rating on the stock. “While we are disappointed with Dave French’s departure, we believe CRUS’ business model remains intact."

Rick Schafer, an analyst with CIBC World Markets, likewise shrugged off the news. “The conclusion of the options review removes a psychological overhand on the stock,” he wrote in a note.

We also anticipate a positive reaction to Mr. French’s decision to step down. We credit him with orchestrating recent turnaround efforts, while noting that his tenure has produced mixed results, at best.

Yesterday morning, Cirrus shares are up 2 cents at $8.43.

CRUS 1-yr chart