Much has changed at Broadcom Corp. since the Irvine chipmaker’s early days. One thing hasn’t: Nobody likes to lose.
The company’s engineers, salespeople and executives push to win business with top customers, land their chips in the coolest gadgets and grab the most market share.
“We are not real gracious losers,” said Tom Lagatta, senior vice president of worldwide sales. “So we compete pretty ferociously.”
Broadcom’s chips go in computers, networking gear and a slew of consumer electronics, including Nintendo Co.’s Wii, Apple Inc.’s iPhone, LG Group’s Internet-linked TVs and the latest phones by Nokia Corp. and Samsung Group.
The company has yearly sales of about $4 billion and had a recent market value of $15 billion.
Broadcom’s hypercompetitive culture dates back to its formative years during the technology boom. Back then, cofounder and former chief Henry “Nick” Nicholas ran Broadcom with a take-no-prisoners style.
Nicholas, who left in 2003, was known for calling midnight meetings, doling out stock options and aggressively pursuing contract wins.
These days, Broadcom is more tempered, professional—even corporate. But a hard-driving techie bent remains.
Part of the company’s maturation has been out of necessity.
For the past few years, Broadcom has grappled with a long ordeal involving improper accounting of stock options awarded to employees.
In early 2007, Broadcom restated several years of financial results to reflect $2.2 billion in charges for misdated options, the biggest restatement bill of any company involved in options.
A federal probe brought criminal charges against Nicholas and other former executives. A judge dismissed the options charges late last year for a court finding of prosecutor misconduct and a lack of evidence. An appeal is pending.
“Anytime you have an organization that’s as wildly successful as this company has been, there are growing pains,” said Chief Financial Officer Eric Brandt, who joined in 2007. “Many companies have had the luxury of doing that over a longer period of time. Broadcom didn’t.”
The company has emerged with a few more gray hairs but with its reputation intact on Wall Street and in the industry.
Chief Executive Scott McGregor, who arrived in 2005, has ushered in stability, credibility and calm, even as the options issue that predated him continued to play out.
At the same time, McGregor has preserved and fostered Broadcom’s fast pace and intense engineering culture.
“I was afraid he was going to bring in big-company processes, procedures and bureaucracy and that we would lose that entrepreneurial feel—but he didn’t,” said Ken Venner, who manages the company’s information technology as chief information officer.
Employees
Broadcom’s some 2,000 workers in Irvine are nose-to-the-grindstone, highly focused types.
“They want to work on difficult chips that haven’t been done before,” said Bob Rango, vice president and general manager of Broadcom’s wireless connectivity group, which produces Bluetooth and other chips. “They want to do things that are revolutionary. The rest of it takes care of itself.”
Venner talks in equally big terms.
“There is this extremely strong drive for getting things done, and, in fact, doing the impossible,” he said. “The people here like to stand up to large, arduous problems.”
More than three-quarters of Broadcom’s 7,500 total workers are engineers who have been plucked from all around the world.
The company prides itself on landing the best minds, many of them with engineering doctorates.
“We set unrealistic goals and we meet them,” said Scott Bibaud, vice president and general manager of the mobile platforms group, which makes chips for cell phones. “We get really good engineers that come to Broadcom because they believe they can meet the challenge.”
Broadcom’s been at its University Research Park campus next to the University of California, Irvine, for three years.
The campus is made up of nine modern buildings surrounded by the sagebrush and scrub of Irvine’s hills.
Workers enjoy some perks—a full gym and cafeteria serving multicultural cuisine.
The office buildings themselves have natural light and modern fixtures, including sliding opaque glass doors that give a Zen vibe.
There are homey touches, including framed art by kids of employees.
Chief Executive McGregor has his office in an opposing corner from cofounder Henry Samueli, who last month was named senior vice president and resumed his title of chief technical officer.
In 2008, Samueli stepped down as chairman and chief technical officer amid the options probe. He remained an adviser.
Samueli’s return to a more formal role was made possible after a judge last month threw out a plea deal he made with prosecutors, saying Samueli didn’t lie to investigators as charged.
The judge also dismissed a Securities and Exchange Commission civil suit that sought to bar Samueli and former executives from serving as public company executives.
Samueli, a soft-spoken former professor, sets the tone for Broadcom’s engineering operations.
“Henry Samueli is the technical grandfather of the company,” Bibaud said. “We look to him for a lot of leadership.”
Between McGregor and Samueli sits financial chief Brandt, General Counsel Art Chong and Terri Timberman, head of human resources. The three were brought on by McGregor.
Executives spend about half their time on the road and much of the rest in meetings.
As in Broadcom’s early days, the line between work and home often blurs.
“Everyone in management lives a life full of meetings and then catches up at home,” Venner said.
With operations around the world, “There is stuff going on all the time,” said Daniel Marotta, senior vice president and general manager of the broadband communications group that produces chips for high-speed modems and TV set-top boxes.
“People are working from their BlackBerrys, on their laptops on airplanes and in their offices,” he said. “Employees are connected all the time.”
The culture is an open one, according to human resources chief Timberman.
“People will ask you anything here, and it’s OK,” she said. “That’s the sign of a very healthy organization. Employees will send Scott (McGregor) a note directly or stop him in the cafeteria.”
Things are fairly decentralized.
The company is organized into four units: wireless connectivity, mobile platforms, broadband communications and enterprise networking, which makes chips for servers and routers.
Each unit is headed by an executive who has a lot of autonomy and responsibility.
The managers act as chief executives overseeing thousands of employees.
They’re responsible for finances, product development, recruiting, managing customers and scouting acquisitions.
“Scott (McGregor) delegates well and lets the four business groups operate very independently,” Rango said. “That’s allowed us to kind of scale up. All the decisions don’t need to go to the highest level of the company, which really does promote a high level of due diligence.”
Many Broadcom executives have advanced engineering degrees, along with—or rather than—business degrees.
From McGregor on down, there’s a discernable geek culture where employees get genuinely excited about technology and their ability to impact lives.
“If someone is talking about some new cool piece of electronics or new gadget, Broadcom is likely working on it,” Bibaud said. “It’s cool to go to Best Buy and see that the products on the shelves have our chips in them. People feel a lot of ownership over that.”
THE TEAM
• Scott McGregor, 53, chief executive, president, director. Joined in 2005 as company’s third CEO. From 2001 to 2005, led Philips Semiconductors, former chip arm of Royal Philips Electronics, now NXP Semiconductors. Earlier, served at Santa Cruz Operations, Microsoft, Xerox, Digital Equipment, now part of Hewlett-Packard. Bachelor’s in psychology, master’s in computer science, engineering from Stanford. Writes company blog. Referees youth soccer. Wife, three kids.
• Henry Samueli, 55, cofounder, senior vice president, chief technical officer. Heads research, development, coordinates engineering strategy. Revered as visionary. Electrical engineering professor for 10 years at UCLA, where engineering school is named for him, as at UC Irvine. Cofounder, telecom gear maker PairGain Technologies. In 1980s, held engineering management posts at TRW. Bachelor’s, master’s, doctorate in electrical engineering from UCLA. Owns Anaheim Ducks with wife Susan.
• Eric Brandt, 47, chief financial officer. Joined in 2007, brought more transparency, mainstream accounting. Responsible for financial goals, mergers and acquisitions, Wall Street. Replaced longtime financial chief Bill Ruehle, who last month saw stock options case dismissed. Brandt earlier was CEO at Avanir Pharmaceuticals, CFO at Allergan. “Brooklyn kid,” chemical engineering background. Bachelor’s from MIT. Harvard MBA. Enjoys golf, snowboarding, cycling, hiking.
• Nariman Yousefi, 47, senior vice president, general manager, enterprise networking group. Heads unit that makes chips for networks, switches, servers, routers. Joined in 1994 as director of networking, helped make Broadcom leader in Ethernet. Previously served in various engineering, management posts at Standard Microsystems, Western Digital. Bachelor’s in electrical engineering from University of the Pacific. Engineering master’s from USC.
• Daniel Marotta, 49, senior vice president, general manager, broadband communications group. Heads unit that makes chips to connect devices in home, including DSL, satellite, cable boxes. Joined in 2002. Promoted to current post in 2003. Spent three years at Conexant. Previously was engineering head at Brooktree, chipmaker bought by what’s now Conexant. Bachelor’s in electrical engineering from SUNY, Buffalo.
• Robert Rango, 51, senior vice president, general manager, wireless connectivity group. Oversees Wi-Fi, Bluetooth, GPS, voice-over-Internet chips. Joined in 2002 as manager of network infrastructure. From 1995 to 2002, was at Lucent, now Alcatel-Lucent. Spent decade early in career at Bell Laboratories, then part of AT&T. Bachelor’s, master’s in electrical engineering, SUNY, Stony Brook. Enjoys skiing and golf.
• Scott Bibaud, 46, senior vice president, general manager, mobile platforms group. Joined in 2000 after acquisition of Innovent Systems. Known as pioneer in wireless radio frequency chips. Rose through ranks, first as marketing director for Bluetooth, then wireless group. Held previous posts at Conexant, Raytheon. MBA from Harvard. Likes cooking French food. Three young kids who play sports.
• Thomas Lagatta, 52, senior vice president, worldwide sales. Oversees sales operations. Joined in 2002, became vice president of enterprise computing group in 2003. Landed current post in 2006. Previous positions at Anadigics, Avenet and storage startup bought by LSI. Likes golf. Plays often on trips with customers in Asia. Ohio State bachelor’s, USC master’s in electrical engineering.
• Arthur Chong, 56, senior vice president, general counsel, secretary. Joined in 2008. Oversees litigation, other legal matters, including law firms Broadcom works with. Earlier was chief legal officer for insurer Safeco, now part of Liberty Mutual. Spent 20 years at healthcare services company McKesson. Bachelor’s from UC Berkeley. Law degree from Harvard Law School.
• Terri Timberman, 52, senior vice president, human resources. Nearly three decades as HR executive. Joined company last year. Focuses on recruiting, employee relations, compensation, benefits and integration of acquisitions. Earlier held positions at Planar Systems, AMI Semiconductor, Tektronix, TriQuint Semiconductors. Moved to OC last year from Oregon. Enjoys reading, gardening.
• Ken Venner, 47, senior vice president, chief information officer. Responsible for all computers, telecommunications used by Broadcom. Joined in 2000, elected vice president in 2002. Previous post as president of product management, chief information officer of Rockwell Electronic Commerce. Spent more than a decade at Bell Labs. Wine buff—600-bottle private collection.
• Neil Kim, 51, vice president of operations, central engineering. Responsible for manufacturing, supply chain. Oversees development of analog mixed-signal, wired radio frequency technologies, quality. Joined as director of engineering in 2000. Promoted to current post in 2001. Spent seven years at Western Digital. Bachelor’s in electrical engineering, UC Berkeley.
