For almost five years I worked in the EDA industry (Engineering Design Automation) on software to simulate VLSI chip designs. At Synopsys I worked on the HDL Compiler and at Quickturn/Cadence I worked on SimServer, which was an attempt to use hardware acceleration to dramatically increase the speed of behavioral Verilog and VHDL simulation.
There was a great deal of talk in the EDA industry about Avant! from the time it was founded. Cadence, and later the Santa Clara District Attorney's office, alleged that Avant! had stolen the initial place and route software that went into Avant's initial product from Cadence. The case went on for years, with Avant denying everything. But the rummors were that the Avant CEO Gerald Hsu was unprincipled and that the alligations were probably true.
On Tuesday, May 22, 2001 Hsu and seven other Avant employees pleaded no contest to the charges. The DA apparently had enough of a case that they felt that they had to make the best deal they could. For the San Jose Mercury News article, click here. Dan Gilmore also of the The Mercury New and one of the finest editorial writers on technical issues in print, wrote Maybe we need a corporate death penalty
The level of morals in the EDA industry is pretty sad. During the attempted hostile takeover of Quickturn by Mentor graphics, a judge commented that the Mentor CEO, Wally Rains, gave testamony that was not "credible" (Judge speak for "he's lying"). Mentor later paid Aptix to sue Quickturn on the basis of an Aptix patent. The executives of Aptix forged evidence and the company was fined as a result.
Does Crime Pay?, Business Week, September 3, 2001
The title of the article pretty much says it all. Despite being a convicted criminal, Gerry Hsu continues on the Avant board and continues to have a large say in corporate affairs.
To alleviate the sting of the criminal proceeding, the board is paying Hsu's entire fine as well as all of his legal expenses. More important, he is remaining as the chairman of Avant!'s board and its chief strategist--roughly akin to William H. Gates III's title and role at Microsoft Corp. (MSFT ) Despite all the rogue behavior, fellow board members seem untroubled by Hsu's record. When the company announced his new role, it cited a mild heart attack as the reason, with no mention of the Cadence case. According to board member Daniel Taylor, a retired U.S. Forest Service park ranger, directors never considered asking Hsu to leave. "He's too precious," Taylor says.
In fact, the board will increase Hsu's $1.6 million salary by 5% a year through 2008, according to documents filed on July 25. That's five times more than Lo's $310,000 annual pay. The board is even trying to cement a continued role for Hsu with a new "poison pill." According to new employment contracts also unveiled on July 25, any decision by shareholders not to reelect Hsu as chairman would be deemed a "change in control." That, in turn, would allow many managers to cash out their options, thereby raising the cost of any hostile attempt to oust Hsu.
While Hsu collects has bloated compensation package, one of the engineers who founded Avanti along with Hsu, Stephen Wuu, will be doing two years of hard time at California's maximum security state prison San Quentin. Wuu received his PhD from UC Berkeley. I've never met Stephen Wuu or even seen his picture. By I imagine him as a skinny academic type. Two years in one of California's most hellish prisons seems harsh when Gerry Hsu gets a slap on the wrist.
Ian Kaplan, May 2001
Revised: November 2001
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