Good morning. Super Micro Computer, which makes high-powered AI servers, wants to turn the page on a recent controversy related to its financial practices. The scandal will result in the company parting ways with its current CFO, David Weigand, as part of its “ambition for future growth.”
The Fortune 500 company announced on Monday that an independent special committee formed by Super Micro’s board of directors has completed its review of financial practices. There was “no evidence of fraud or misconduct on the part of management or the board of directors,” according to the company. The evidence did not raise any “substantial concerns” about the integrity of the company’s senior management or audit committee or “their commitment to ensuring that the company’s financial statements are materially accurate.” And a restatement of reported financials is not expected.
Super Micro formed the committee last summer to conduct an investigation after its auditor EY flagged concerns to the board’s audit committee in July about the company’s accounting practices and internal controls. EY resigned as the company’s auditor in October. BDO is the company's independent auditor as of November. Super Micro is working on filing audited financials for its fiscal year that ended June 30 and for the first quarter of fiscal 2025.
In August, short-seller Hindenburg Research claimed Super Micro continued to engage in questionable accounting practices. Subsequently, the Department of Justice opened a probe into the company in September.
Super Micro was delisted by Nasdaq in 2018 for not meeting deadlines to file its financial reports. The company got approval to rejoin in 2020 after settling with the Securities & Exchange Commission. During that time, the company parted ways with its CFO, Howard Hideshima, who was alleged by regulators to have engaged in improper accounting, Fortune reported. In the years since being listed again, Super Micro has seen a 3,000% run-up in its stock price and does business with Nvidia, Fortune’s Amanda Gerut and Sharon Goldman recently reported.
Searching for a CFO
Although Super Micro said in Monday’s announcement that the committee did not find fraudulent actions, they did suggest finding "a new CFO with extensive experience working as a senior finance professional at a large public company.” This would support the "company’s growth over the past two years in helping to lead the AI revolution," according to the announcement.
Weigand, finance chief at Super Micro since 2021, will remain in the role until the board selects a new CFO. Before becoming CFO, he was chief compliance officer at the company. He previously was VP at Hewlett Packard Enterprise, VP of Tax at Silicon Graphics International, Inc., and CFO of Renesas Electronics America, a semiconductor company.
To enhance governance, the committee said there should not be a combined CFO/chief compliance officer (CCO) function, so Super Micro is now also searching for a CCO. The company is seeking a general counsel as well. And Kenneth Cheung, currently VP of finance and corporate controller, has been appointed chief accounting officer.
I asked Shawn Cole, president and founding partner of executive search firm Cowen Partners, for some insight on what type of CFO would best serve Super Micro.
“At this stage, a reporting-focused CFO is crucial to restoring internal controls, ensuring regulatory alignment, and strengthening relationships with auditors and stakeholders,” Cole told me. And “ideally someone with a background as a former Big 4 auditor and CPA,” he said. This combination of experience would bring deep expertise in accounting, regulatory compliance, and financial governance, paired with a track record of working as a CFO of a large public company in a similar space, he explained.
Companies like Super Micro often benefit from creating hyper-focused C-suite roles to address specific needs, Cole said. “For instance, appointing a chief accounting officer earlier could have provided the necessary expertise to maintain tighter financial controls and oversight,” he said.
Cole added: Super Micro is an example of "a fast-growing company that outgrew its CFO and team, highlighting the challenges that come with scaling operations and governance of a public company."
Sheryl Estrada
sheryl.estrada@fortune.com
The following sections of CFO Daily were curated by Greg McKenna.
