San Jose software maker Cadence Design announced a major corporate shake-up Wednesday with the resignation of its chief executive, Michael Fister, and four other top executives.
Until a replacement for Fister can be chosen, Cadence said the company will be run by an interim team that includes Chairman John Shoven, board member Lip-Bu Tan and Chief Financial Officer Kevin Palatnik.
The other executives who quit are Kevin Bushby, executive vice president of worldwide field operations; James Miller Jr., executive vice president of products and technologies organization; William Porter, chief administrative officer; and R. L. Smith McKeithen, executive vice president of corporate affairs.
Cadence’s stock price fell 80 cents, or about 15 percent, to close at $4.50 after the announcement.
The company praised the departing executives, but gave no reason for their resignations. Cadence declined to comment beyond a statement it issued, which said Fister’s leaving was “by mutual agreement” between him and the board.
Since Fister was named Cadence president and chief executive in August 2004, the company — whose software is used to make computer chips — has seen its annual profit increase from about $49 million in 2005 to $143 million in 2006 and $296 million last year.
However, it suffered its first quarterly loss under his leadership during the first three months this year, when it dipped nearly $19 million into the red. And its second-quarter profit this year was just under $5 million, its lowest in three years.
Cadence also experienced a setback in August when it withdrew its $1.6 billion offer to buy rival Mentor Graphics of Oregon, complaining that Mentor’s refusal to negotiate had made it difficult for Cadence to raise money for the deal.
In a report to its clients Wednesday, J.P. Morgan said replacing Fister was in the company’s best interest.
“We think this was a necessary step to show employees, customers and investors how serious the board is on making sweeping changes to bring Cadence back to the levels of business it was generating” in early 2007, it concluded.
Contact Steve Johnson at sjohnson@mercurynews.com or 408-920-5043.