{ "docId": "019dd923-622c-750b-8b98-c99fec0ed8aa", "docSlug": "1c836eeb374c", "documentTitle": "Monolithic Power Systems (MPWR)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-10-09 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 79, "pageCount": 95, "prevPage": 78, "nextPage": 80, "slideType": "testimonial", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses a call-and-response format to frame the executive's testimony as evidence of poor corporate governance.", "elementsJson": [ "headline_text", "paragraph", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-c99fec0ed8aa/79", "deckHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa#slide-79", "components": [ { "bbox": null, "kind": "callout", "text": "As part of our diligence, we spoke with a former senior executive from the early days at Monolithic. His insights about the Board, and notably that the Audit Chairman was asked to leave for “asking questions the CEO didn’t like” that “rocked the boat” should be viewed as a major red flag.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-ee38-728b-98ce-ff5d4d48ffd0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.9, "x": 0.05, "y": 0.0017 }, "kind": "paragraph", "text": "As part of our diligence, we spoke with a former senior executive from the early days at Monolithic. His insights about the Board, and notably that the Audit Chairman was asked to leave for “asking questions the CEO didn’t like” that “rocked the boat” should be viewed as a major red flag.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f7202899-559c-41f1-9599-00a9aa7293b8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.78, "x": 0.2, "y": 0.28 }, "kind": "quote", "text": "Can you talk about Herbert Chang as an early investor in the Company and Board member.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5c7a1138-2c69-4fb7-8512-c516c3a58ab4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.78, "x": 0.2, "y": 0.38 }, "kind": "quote", "text": "I would not put him very high on that list. But he's Taiwanese. He's a Taiwanese entrepreneur. He's invested in a lot of different things. He's made tons of money. His latest fun thing was he was, uh, helping, uh, singers in Taiwan. Uh, you know, it's like K-pop, Taiwan pop singers. He was sponsoring singers and stuff just for fun, very interesting guy. But, uh, uh, he's not, he's, Taiwanese, he doesn't really care much about corporate governance per se. I always thought Herbet would leave the Board because on the other hand, Michael doesn't make board members do much. So I think Herbert just stays on the Board just cause it's, you know, he's friends with Michael and it's fine with him. He doesn't have to do much work. He (Herbert) probably, makes/missed half the Board meetings.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7cfa35d5-746f-4d03-9368-9b5f5c065ccd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.78, "x": 0.2, "y": 0.77 }, "kind": "quote", "text": "And we went through some real hard, and we had some real difficulties with the failed Sarbanes-Oxley and Alan was a straight shooter. I mean, he's a partner for big four accounting firm. Um, and that was actually what got, Allen fired from the Board. Like, well, you're not fired. You're told not to sign up. Again, happened to Alan, he was kind of quite happy. Michael (CEO) doesn't like people asking questions he doesn't like. And Alan was doing his job as audit chairman and sort of rocked the boat too much. We got through all the three statements and all kinds of problems that we had to fix and things are going smoothly and then Alan disappeared.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8f4eac26-e896-43ec-9de4-151fd10ba014", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.78, "x": 0.2, "y": 0.67 }, "kind": "quote", "text": "Just looking back at the original people involved. Mr Alan Earhart, PwC, he was the Chairman of the Audit Committee. He left in 2009, did you interact with him?", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e19b002c-d47f-4730-ad44-2bbf422ee578", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“I would not put him very high on that list. But he's Taiwanese. He's a Taiwanese entrepreneur... he doesn't really care much about corporate governance per se.” — MPWR's Early Executive; “Michael (CEO) doesn't like people asking questions he doesn't like. And Alan was doing his job as audit chairman and sort of rocked the boat too much.” — MPWR's Early Executive", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-ee38-728b-98cf-01ab323c19bf", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.9, "x": 0.05, "y": 0.96 }, "kind": "source-note", "text": "Note: During the 2008 period prior to Earhart’s departure, MPWR delayed its 10-Q, issued a non-reliance opinion, and noted a material weakness (source / source)", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4c44119e-03a5-4341-830e-2013c028481a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.65, "x": 0.28, "y": 0.03 }, "kind": "title", "text": "Board Insights From A Former MPWR Executive From The Early Days", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "574549af-890b-4c59-ba70-6f22891f0b05", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "call-and-response", "slug": null, "matchId": "8f494cca-d139-4c64-bd8e-2564db297721", "evidence": "The slide alternates between Spruce Point questions and executive answers.", "confidence": 0.9 } ], "arcBeats": [ { "to": 95, "from": 41, "beatId": "7f502b1a-d13a-4cdb-a619-66898178d5f2", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Solution (Provide relief)", "beatSlug": "problem-agitate-solution-solution-provide-relief", "evidence": "The document finally presents a solution, estimating 75-85% downside risk and providing a detailed valuation analysis.", "position": 2, "confidence": 0.8, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }