Newport Corp. went to great lengths in the past few years to revamp its board with big names in the science and corporate worlds.
The catalyst: Father Time.
The Irvine-based maker of lasers and related equipment for telecommunication companies, chipmakers, researchers, medical companies and manufacturers has brought on three board members in the past three years to replace retiring directors.
The appointments brought on expertise in research, Asian markets, and governmental relations and weren’t meant to usher in change but rather steer the mature niche company on a steady growth trajectory that maximizes synergies with measured acquisitions.
The company still aims to serve the defense, research, and industrial markets that have made up the foundation of its customer base for more than four decades.
Newport Corp. was pressed into action four years ago with the pending retirement of Bob Guyett, a consultancy executive who had been on its board since 1990.
Guyett was about to turn 73, the mandatory retirement age the board adopted in 2005, though the requirement had already been a long-standing informal policy.
“It’s become a best practice among boards to provide for some level of ongoing refreshment so you don’t have a situation where every one of your directors has been on the board for 25 years,” said Newport Corp. Senior Vice President and General Counsel Jeffrey Coyne.
The trend toward regular lineup shifts in the boardroom is particularly true in the fast-changing world of technology. It’s also been pushed along in today’s era of activist investors, and the message is ringing loudly across corporate America. Nearly three-quarters—73%—of the boards of S&P 500 companies now have a mandatory retirement age, according to a study published last year by Chicago-based executive search and advisory firm Spencer Stuart.
Chris Cox
The median age of independent directors is 63, one year older than international law expert and Beltway insider Chris Cox, a partner at Morgan Lewis & Bockius LLP who replaced Guyett on Newport Corp’s. board in November 2011.
The nine-term Newport Beach-based congressman, who went on to serve as chairman of the Securities and Exchange Commission, brought the company deep international business connections, capital markets expertise, and extensive knowledge of corporate governance issues, global defense and security.
“He’s a very strong strategic player,” said Kenneth Potashner, Newport Corp.’s chairman since 2007.
Cox, who was courted for board positions since rejoining the private sector in 2009, said he was impressed by Newport Corp.’s management team and laser technology, which has helped scientists win Nobel prizes, engineers increase data on memory chips, doctors perform surgery, and help fishing boat captains navigate the open sea in the dead of night.
The laser maker’s technology also was behind the first supermarket scanner to read a grocery item bar code—on a 10-pack of Juicy Fruit gum at a Marsh supermarket in Troy, Ohio, on June 26, 1974. The scanner is now housed at the Smithsonian National Museum of American History in Washington, D.C.
“This company’s history is very special in Orange County,” said Cox, who’s based in the Costa Mesa office of Philadelphia-based Morgan Lewis. “To have this kind of gem right in our backyard was exceptionally appealing.”
Cox has always been interested in technology—call it a family affair.
His son Charles, a former propulsion engineering intern at Hawthorne-based SpaceX, is poised to graduate from Stanford University in June with an aerospace engineering degree.
Cox’ brother-in-law is Mike Gernhardt, an astronaut who’s traveled to the International Space Station four times.
“There’s just a lot of reasons that I love the field,” Cox said.
Newport Corp. faced two more mandatory board retirements a little more than a year after Cox joined as an independent director.
Patel’s Replacement
Kumar Patel, who came on in 1986, brought extensive expertise in business, academia and research. The former vice chancellor of research at University of California-Los Angeles and former executive research director at AT&T Bell Laboratories has been nominated for the Nobel Prize multiple times for his groundbreaking discoveries and inventions related to energy transfer and lasers.
In the search for a replacement for Patel, who retired last year, the company scoured contact lists generated from law firms and other service providers; internal networks; and the Santa Ana-based Forum for Corporate Directors, where Cox serves as chairman.
Cherry Murray, dean of the School of Engineering and Applied Sciences at Harvard University, rose to the top of the list. Among her other bona fides: a tenure as principal associate director for Science and Technology for Lawrence Livermore National Laboratory in Livermore; leadership roles in numerous research programs for nearly three decades at Bell Laboratories and Lucent Technologies; and a recipient of the National Medal of Technology and Innovation, the highest civilian recognition by the White House in the industry.
Murray was named to Newport Corp.’s board last year.
“She has very, very deep understanding of the research community in our area and understands the business of research,” Coyne said. “It’s the core of the company and where the company’s roots are.”
Sales in the scientific research market last year accounted for 21% of Newport’s $605 million in revenue, a record for the company, which ranked No. 27 out of 100 entries on the Business Journal’s recent list of OC’s biggest public companies.
Kadia Steps In
Then came the pending retirement of independent investor Michael O’Neill, who joined the board in 2003 during his tenure as chief executive of Anaheim biotech company Miragene Inc.
O’Neill, who also spent 22 years in various senior executive roles at Beckman Instruments Inc. in Brea, stepped down from the board late last year and was replaced by Siddhartha Kadia.
The 45-year-old Kadia was sought for his far-reaching understanding of the life and health science market, which accounted for 22% of Newport Corp.’s sales last year. He also brought considerable management experience and ties to Asia, the fastest-growing region for the company since it established a manufacturing plant in 2007 in Wuxi, China, where it has about 150 workers.
Kadia, who heads Santa Clara-based lab testing services provider Evans Analytical Group, spent nine years at Carlsbad-based Life Technologies Corp. and its predecessor, serving two years in Tokyo and two years in Shanghai. He made Asia the fastest-growing region for the company and oversaw about 1,200 workers.
“That allowed me to really understand how large American companies can build business in Asia,” said Kadia, who lives in Solana Beach, just south of OC in San Diego County, and commutes to Silicon Valley. “As a working CEO, I understand how to turn high strategy into execution. I have a very good understanding of the business.”
