<http://www.latimes.com/business/la-fi-golden3nov03,0,7503296.column>
This Chief Executive Is Blunt With a Capital B Michael Hiltzik Golden State November 3, 2005 "It's evil," T.J. Rodgers said emphatically. The founder and chief executive of Cypress Semiconductor Corp. was explaining why he took it personally when his counterpart at Whole Foods Market suggested that maximizing shareholder returns should be only a secondary concern of public companies. "That's what I'd call coercive utopianism," he said. "It's directly socialist." It doesn't take much to send Thurman John Rodgers into full-scale pugnacious mode. Over the years he has taken on a Franciscan nun, Jesse Jackson and his own industry on behalf of the principle that corporate management should be freed from political fashions, foolish regulations and government handouts. So no one was particularly surprised at the intensity of his remarks in a forum on corporate social responsibility last month in the libertarian magazine Reason, also featuring John Mackey of Austin, Texas-based Whole Foods and the economist Milton Friedman. Mackey's pitch was that contributing to charity and treating customers and suppliers well are primary virtues that happen to enhance the bottom line. Friedman countered that he had things backward — that maximizing profits is the sole reason for, not the byproduct of, corporate philanthropy and customer service. And Rodgers went ballistic at Mackey's "subordination of his profession as a businessman to altruistic ideals." When I reminded Rodgers that San Jose-based Cypress also believes in corporate philanthropy and good employee and customer relations and thus that he and Mackey were not so far apart, he repeated that emphasis is important: "I'm not a food bank contributor who decides to make semiconductor chips. I'm a chip guy who gives to a food bank." Corporate America has no dearth of blunt-spoken CEOs, but Rodgers squeezes blunt until it screams for mercy. The most famous example involved a 1996 letter he got from Sister Doris Gormley, a shareholder advocate at a Franciscan order in Pennsylvania, noting that the racial and gender diversity of the Cypress board had been weighed and found wanting. His response was best summarized as, "Look, Sister." In a widely published letter, he informed her that Cypress directors performed a "critical management function" and thus required expertise in semiconductors and experience in top management. These criteria usually yielded a 50-plus male with an advanced engineering degree, he wrote, advising the nun to "get down from your moral high horse." Nor is he shy about taking on his own corporate compatriots. Attacking the government handouts on which he thought his industry was becoming hooked, in 2000 he wrote a pamphlet for the libertarian Cato Institute titled "Why Silicon Valley Should Not Normalize Relations With Washington, D.C." Given that the Rodgers publicity file brims with magazine cover stories labeling him the "Bad Boy of Silicon Valley" and listing him among the country's "toughest bosses," I was prepared to be a tad intimidated when I met him for dinner last week at Bravo Fono, a Palo Alto restaurant where he's a regular. What I found was a businessman with a rigorously consistent viewpoint that is impossible to pigeonhole in conventional political terms. "The biggest argument I ever had in this place was with a bunch of Bush Republicans," he told me, describing an encounter that measured about 9.0 on the Richter scale. (Suffice to say that he found their attitude toward sexual morality to be hypocritically priggish.) At 57, Rodgers still has a boyish thatch of sandy hair and a burly torso, a reminder of his football days at Dartmouth. (His electrical engineering PhD is from Stanford.) He spent a good part of the evening regaling me about his Woodside vineyards and winery, where he strives to produce Pinot Noirs styled after the great French Burgundies. "I study Romanee-Conti the way competitors study Intel," he said, referring to the regal domaine where he once picked the brain of the owner, Aubert de Villaine. He then uncorked a superb 2002 Pinot Noir in a bottle adorned, like all his wines, with a Cypress memory chip. Rodgers founded Cypress in 1982 after leaving Advanced Micro Devices, where he worked under its legendary CEO, Jerry Sanders. Rodgers deeply admires Sanders, even though the latter sued him after he quit. "We went through war for 10 years," Rodgers says, misting up at the recollection that Sanders nevertheless asked him to speak at a testimonial when he retired. As a specialty chip maker, Cypress recorded rapid growth through the early '90s but got derailed by the dot-com bust. On track to reach $1 billion in sales by 1997, it didn't surpass that mark until 2000, then immediately fell back. Rodgers projects that sales will again exceed $1 billion in 2006. In its quarter ended Oct. 2, Cypress returned to profitability on an "adjusted GAAP" basis — that is, excluding several items required under generally accepted accounting principles that Rodgers considers irrelevant to tracking the company's business — after three quarters in the red. Since the dot-com crash, Cypress has diversified. Its largest segment is chips for consumer devices, particularly those that connect with computers through USB ports; it recently landed a huge order to supply Apple iPods. It's clear that the crash reinforced what Rodgers long understood about the value of tough-minded management. Proudly, he characterizes Cypress essentially as a dot-com that survived, but it sounds like it was a close call. "I am a mammal," he says, "and during the next nuclear holocaust I will crawl into a hole and I will emerge to propagate my race. But it was pretty … ugly."
