It is true for anything with a board, of course. But there is no rule mandating boards.
> If you publicly humiliate your family and the business, you're out
There is no "* only applies to publicly traded companies". Hence, it is incorrect.
In theory, Nvidia shareholders, if dissatisfied with today's decision, could vote to oust the current board and replace it with people more sympathetic to Huang, who would, as their first decision, re-hire him as CEO, as would be their prerogative. This is... unlikely to happen.
None of the above is investment advice.
There are many examples where the outed affair resulted in nothing material when neither of the above was true.
This case, seems to touch both.
Marriages of 41+ years can get into literally any kind of dynamic.
His open letter about his infidelity seems to imply he has embarrassed his wife and family, have you read it?
He has also said so very many times in so very many ways that Nvidia was absolutely not involved in violation of export control laws regarding the export of its products to China. That -in fact- there was absolutely no smuggling going on and claims to the contrary were utterly baseless and without merit.
I agree with ohnnyApplePRNG's assertion that we know literally nothing about the private life and situation of Mr. Huang and his family.
> we know literally nothing
He "literally" wrote about how his actions hurt his family, I'm not sure why there's a second account parroting the exact same phrase.
He repeatedly and aggressively lied about violating export restrictions. "Our chips aren't potato chips. These GPUs weigh two tons. [So, how would you smuggle those? It'd be impossible!]" is an especially memorable deflection of his. He's obviously very willing to lie about very serious things when doing so is beneficial.
> He "literally" wrote about how his actions hurt his family...
He also spoke and wrote about how it was impossible to smuggle Nvidia hardware into China, and that everyone who was claiming that smuggling was going on were liars. CEOs will often lie when issuing Obligatory Standard Statements, whether they be brusque dismissals of accusations of the company's wrongdoing, or assertions of how shameful they consider their behavior that lead them to do whatever it was that they've been caught doing. CEOs make the expected public statement and get on with their lives.
Plus, given how most folks are -at best- confused by and -at worst- enraged by things like polyamory, why on earth would he publicly reveal it if his family was actually totally okay with regular extramarital sex and romance?
No, situations like this get the Standard Admission of Deep Shame and Regret For All The Harm Caused, regardless of whether or not what's said has any resemblance to what the family feels about the situation. The only folks who know how the members of the family feel about this are folks who actually know the family.
Don't get me wrong, I'm very much a promoter of monogamy.
I think it is naive to assume that such public statements are the whole truth of a matter.
People who fuck up a company (or have an affair, or get caught snorting drugs off a sex-worker) aren't really 'stepping back to spend more time with their families'. Historically the classic example of executive public statements.
If you have stronger evidence that the statement was untruthful when it said he hurt his family, you may present it.
Until such time, the statement only strengthens the bayesian prior, which is that his affairs hurt his family, and that is what we can conclude.
Yes, and it would have helped. These are entirely different stories:
"My wife and I have a non-traditional relationship and would prefer to keep the specifics private, but no harm was caused by my actions."
"I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry."
It's clearly the CN link and/or the cosying up with a customer that is the problem; the board would not care about his private life (and neither should the public, tbh).
And the open letter sounds more like it was written the way the public would expect a CEO to write.
That's a very narrow view that's a function of one's religion, culture, and values.
When I was in school, (US) my very Catholic French teacher explained that his uncle, in France, had a mistress. His uncle's wife knew and was okay with it. What my teacher was explaining is that the culture around marriage varies considerably through the world, and you can't take for granted that what we were taught (monogamy) is the standard that others live to, or even expect from you.
Perhaps it’s you that is out of touch?
Please don't make the mistake of assuming that American culture is homogeneous: It's not.
No, there isn't.
There is a significant part of American culture that separates personal life from professional life. IE, an affair is treated as a private matter to be handled by the married (or committed) couple. (IE, this is why many people in this thread focus on Huang's job performance over the affair.)
And I agree with the latter: The affair is a matter between Huang and his wife; it's a signal of his trustworthiness and honesty, and raises concerns about national security. But beyond that, it's not my place, or your place, to judge.
Well we don't know that, you are not legally required to love someone you are married to and I have no clue what their relationship is like or whether they have any sort of "arrangements". I could hardly care less really since its their private matter.
> just what might he do to you, the customer or shareholder?
I don't really see a correlation between those things. All sorts of immoral degenerates (e.g. Musk, (potentially) Gates and I assume plenty of other lesser known CEOs) have generated massive amounts of value for their shareholders.
Where?
Look at the NVDA stock chart. There you go! That's why affairs are relevant to business! Business is always about trust, and someone who isn't deserving of their own spouse's trust certainly isn't deserving of anyone else's.
Why? I'm playing a bit devil's advocate here, but why? Because society think it's bad and a leader should be associated with positive views? Because if they got caught they are not smart enough to be the leader?
Why just this specific thing is to be considered? Why, for example, all the Musk's "extravagances" are not ground for a CEO termination? I'm pretty sure many other CEOs have many of those "extravagances" and manage to keep their position but yet, if you have an affair, you're 100% toasted.
Maybe I don't understand enough the US culture.
In 2016, the choice was between Trump and Clinton. Clinton famously excused her husband's infidelity by calling the long list of women who claimed they were assaulted as "a little bit nutty and a little bit slutty".
In 2024, the choice was between Trump and Harris. Harris got into politics by being the mistress of a CA governor.
It would be interesting to see what would happen if the US presidential election offered a choice between someone who was moral and someone who was as immoral as our existing political class. But that has not happened in my lifetime, and I don't expect that to change.
But anyway a person's character is not cleanly separable between personal and professional life, so yeah affairs add (many) points to the "not to be trusted" column.
> Business is always about trust, and someone who isn't deserving of their own spouse's trust certainly isn't deserving of anyone else's.
This has less to do with the relative social morality of his behavior, and rather that he has more control over the boards of his companies, and his personality represents a larger percentage of the perceived values of his companies.
Meaning that the desire and leverage for shareholders or the board to actually punish him is significantly less. Shareholders would potentially be evaporating trillions in speculative market value that is not backed up by Tesla or SpaceX's actual business fundamentals.
And any shareholders who disagree with his behavior have had plenty of time to leave and take their earnings by now.
In this case, Huang hit all three. Changing CEOs is also a good way to get the media coverage over faster, or at least change the narrative in the pubic (and investors) minds.
If it were just an affair, I doubt he would have lost his job. It wasn't, though, and the other circumstances- potentially dodging export controls and abusing a role of power over a subordinate- came with far too much heat, so to speak.
Also, affairs make for much more entertaining gossip than the other items, so it's probably natural that that aspect gets talked about more.
*Everything on a spectrum.
It is a conflict of interest same as any other. If there is no conflict of interest then the company won't care. As the CEO of the company every other employee works for him and in turn he has power over them.
Society will not like you (in the US), but nothing more will happen.
Markets care about predictability.
To that end, it's the secret and the reveal of that secret that's the issue for a leader. If a CEO is open about his socially-unacceptable behavior from the beginning, there's no shock to absorb.
I'm jealous!
Seems like a real analytical breakthrough that I'd legitimately love to learn more about.
Humans don't have some kind of overall "morality" or "judgment" setting that applies equally to all areas of life, where a failing in one area translates to failings in other areas.
You can be an amazing CEO and a terrible father. You can have the best judgment in the world around mothering, and abysmal judgment in business. Most importantly, you can be totally trustworthy in the realm of business, yet not in romance.
The idea that there is this binary switch, where someone is either perfectly trustworthy in all contexts, or else you can no longer trust them in any context, is just not an accurate understanding of how real human beings work. It's not supported by modern psychology.
My company is willing to hire my wife, but she wouldn't be allowed to work for me, nor I her.
At the end of the day Jensen chose to have an affair with a senior officer of a company strongly suspected of bypassing trade restrictions and should have known that it would be a terrible look for Nvidia and himself. Even if he didn't suspect her of being an agent of China, even if he didn't believe the allegations against Mega speed, even if he had no intentions of passing confidential information or aiding in bypassing trade restrictions. He knew it would carry the appearance of all those things.
That is the unforgivable lapse in judgement.
If you can't adhere to the terms of a voluntarily-entered personal contract, why should I believe you'll be trustworthy in other impersonal contracts?
- Signed, another European
In a Goffman Front Stage/Back Stage sense, you are supposed to keep the front stage presentation on the level of a pious monk or nun.
The irony to me is this just another asymmetrical advantage for Chinese culture.
There's a reason why government background checks looks at financial records. Someone that has trouble paying their bills due to a gambling habit might be easy to turn by the enemy with some cash. Or someone that regularly cheats on their wife might be willing to do some favors for a pretty girl if she lets him sleep with her.
"Haha you mean the Chinese spy guy? Hey ask if you can get a discount if your secretary sleeps with their CEO haha"
"It's not the crime, it's the coverup."
Also, an affair is only blackmail material in a society of prudes. I recall the story about a president who was confronted with condemning photos of his activities by CIA agents, and he pretty much encouraged the agents to publish the photos.
You don’t have to be a prude to think cheating on a spouse is condemnable.
In general, it also doesn’t really matter what society thinks. You can just threaten to reveal the affair to the spouse. And even in the case the spouse doesn’t really care it’s fodder they can potentially use in a divorce to get a better deal.
For better or worse, this is the world we live in.
Sukarno. "Project Happy Days", lol.
He (Sukarno) thought it was hilarious and sent copies to his friends.
CIA was pissed w/ him because he killed a lot of Communists but then started leaning to China and beefing with Malaysia, which irritated the British
Although if you read his Wikipedia page, he had many, many wives, some concurrently, and the youngest was 19...so it's probably true, lol.
Then you read about a certain EV company CEO and his escapades and repopulating the planet, and you don't know what to think.
Or Charlie Sheen...
I guess politicians, celebrities and CEOs are another world from us mere mortals.....
No? All it requires is for Jensen to want to remain with his wife, and for his wife to be willing to divorce him if she finds out he has an affair. Very little involvement from society in that one.
he was fucking a spy
he was fucking one of his direct reports
what are two things you shouldn't ever do as a CEO of the biggest company in the world?
this wasn't Cindy the random waitress from the Palo Alto Ruth Chris', these were literally two people he should never be fucking
he put the company at risk of national security issues and HR lawsuits for what is otherwise painfully mid-tier pussy. he's gotta go.
This is an extremely unnecessary misogynistic comment.
This is how things change. Slowly and then all at once. If the board were more in love with him, they'd probably have been willing to turn a blind eye for just a little while longer. No such luck for Jensen, but we make our own luck in these things.
I can hardly imagine anything more stupid than judging the aptitude of the CEO of a 5T$ business based on his private love life.
You should be concerned about corporate crime.
That doesn't change that there is a conflict of interest here and any company should fire someone who has a conflict of interest that they are not carefully managing to ensure they don't become real.
It's not entirely about humiliation.
Having an affair (or multiple, in this case) demonstrates poor decision making. You don't want someone who can't make wise choices running your company.