Brocade CEO Resigns7:22 PM EST Mon. Jan. 24, 2005
Greg Reyes on Monday resigned as chairman and CEO of Brocade Communications Systems, a position he has held with the data storage networking vendor since 1998.
Michael Klayko takes over as CEO and newest director of the board for Brocade, of San Jose, Calif.
Klayko joined Brocade 12 months ago when it acquired Rhapsody Networks, where he was CEO and president. He has been Brocade's vice president of worldwide sales since the acquisition.
Klayko's reassignment comes on the heels of a completed internal review conducted by Brocade's audit committee. As a result of that review, Brocade said it will restate fiscal 2002 net income to reflect a $66 million increase.That gain is offset by losses in other years, however. Net income for fiscal 2003 and 2004 will be reduced by $11 million and $30 million, respectively. For the fiscal years prior to 2002, Brocade will lower net income by a total of $304 million.
The audit committee said it found improprieties related to documentation of stock option grants.
Carl Wolfston, director of Headlands Associates, a Pleasanton, Calif.-based solution provider, was surprised by Reyes' resignation, and that Reyes can claim responsibility for Brocade's channel strategy.
"Greg was the one [at Brocade] who set the strategy to support the channel," said Wolfston. "Originally, they sold only through OEMs, but their switches are now available through distributors."
The shakeup at Brocade comes at a time of upheaval in the fibre channel switch industry. Last week, Brocade rival McData, of Broomfield, Colo., moved to acquire Computer Network Technology, a Minneapolis-based developer of high-end director-class storage switches.