Nvidia's 4.34% Drop Shows How Boards Handle a Scandal Exit

Nvidia closed down 4.34% at $166.19 on Nov. 12, ending just above $4 trillion in market value, after founder Jensen Huang resigned as chief executive and director. The shares had fallen as much as 14% intraday before the close.

The board named CFO Colette Kress, CFO since 2013, interim chief the same day, keeping her finance job, and said it would consider internal and external candidates for a permanent chief. Longtime director Harvey Jones became Nvidia's first separate board chair, and said the board expects "operations, customer commitments and product roadmap to continue without interruption."

The inquiry is not finished. Independent directors hired Wachtell, Lipton, Rosen & Katz and former acting US attorney Joon H. Kim on Nov. 10, and the company will continue the inquiry after Huang's departure, The Information reported. The 8-K describes no severance or other compensatory arrangement for Huang, and Nvidia's executive officers have no individual employment, severance or change-in-control agreements, Reuters reported, citing the proxy. The company has not said whether it will seek to recover any compensation. Huang's wealth sits mainly in shares held through family trusts and LLCs, according to his filings.

How did earlier boards handle a relationship-related exit?

Intel, June 2018: internal and outside counsel confirmed that Brian Krzanich had a past consensual relationship with an employee, violating a non-fraternization policy that applies to all managers. He resigned as CEO and director, CFO Bob Swan became interim chief, and after a seven-month search the board made Swan permanent on Jan. 31, 2019. The Wall Street Journal reported the relationship had ended years earlier and predated his tenure, according to SiliconAngle.

McDonald's, November 2019: the board removed Steve Easterbrook on a Sunday, citing "poor judgment involving a recent consensual relationship with an employee." Easterbrook told staff the relationship "was a mistake" and that "it is time for me to move on." Chris Kempczinski, who ran the US business, became CEO immediately, and the SEC later said his separation terms let him keep substantial equity compensation.

BP, September 2023: Bernard Looney resigned after accepting that he had not been fully transparent about past relationships with colleagues, and CFO Murray Auchincloss became interim CEO. The board first heard allegations in May 2022; Looney then disclosed past relationships and gave written assurances the board later concluded were inaccurate. Auchincloss became permanent CEO on Jan. 17, 2024, after a search that weighed external candidates.

Nestle, September 2025: the company dismissed Laurent Freixe after about a year as CEO. An investigation overseen by chairman Paul Bulcke and lead independent director Pablo Isla found an undisclosed romantic relationship with a direct subordinate in breach of the code of conduct. Staff concerns raised through an internal channel were first found unsubstantiated, and Freixe initially denied the relationship to the board. He received no exit package, and Nespresso chief Philipp Navratil took over at once.

Uber in June 2017 is the closest founder precedent, though the charge was workplace culture rather than a relationship. After a report by former Attorney General Eric Holder, five major investors including Benchmark asked Kalanick to step aside in a letter titled "Moving Uber Forward." He kept his board seat and a large stake.

What happens after the CEO leaves?

In two of these cases, the costliest findings arrived months after the exit. McDonald's received a tip in July 2020 about other relationships, found evidence that Easterbrook had concealed them, and sued him in August 2020 for lying to the board. In December 2021 he agreed to return about $105 million in cash and stock, the amount he would have forfeited had he been fired for cause, and apologized to the board, staff, franchisees and suppliers. In January 2023 the SEC fined him $400,000 and barred him from serving as an officer or director for five years; he neither admitted nor denied the findings. The SEC also faulted McDonald's disclosures on his separation terms but imposed no penalty, citing the company's cooperation. CNBC reported the stock had nearly doubled under Easterbrook.

BP moved faster. In December 2023, three months after Looney resigned, the board concluded he had "knowingly misled" it in July 2022, treated that as serious misconduct, and dismissed him with immediate effect, ending his 12-month notice period. BP said he would forfeit up to £32.4 million, mostly unvested share awards:

• 87% forfeited automatically on his resignation
• 10% forfeited on the misconduct finding
• 3% clawed back at the board's discretion

Why is Nvidia's case different?

First, the man at the top. Huang co-founded Nvidia in 1993 and ran it until this week, and Reuters reported he holds about 3.61% of the company, making him its fourth-largest investor. Krzanich, Easterbrook, Looney and Freixe were career executives. Kalanick left the CEO job but kept a board seat and a large stake; Huang gave up his seat as well.

Second, the allegations. Huang's case involves reports, which Nvidia has not addressed, that he had a relationship with Alice Huang, a former executive of Nvidia customer Megaspeed whom US authorities suspect of spying for Beijing, a claim Beijing denies. Huang told employees in a Nov. 8 message that he had been unfaithful to his wife, and he has denied compromising national security or Nvidia secrets, CNBC reported. That has brought congressional testimony, Justice Department inquiries and a shareholder class action, none of which featured in the corporate cases above.

What do the precedents actually predict?

Less than a forecast. Boards that named an interim CFO have kept that person, and investigations that continued after an exit twice produced findings that changed a former CEO's terms. Nvidia's board has not said whether or when the Wachtell findings will be published. The share-price record is also imperfect: some first-day figures are early-trading moves, others are closing moves.

• Intel, June 2018: nearly -2% in early trading
• McDonald's, November 2019: more than -2%
• BP, September 2023: up to -1.7% at the open
• Nestle, September 2025: -0.8%

Nvidia's drop is more than double BP's 1.7% open decline and more than five times Nestle's 0.8%, and it landed on top of earlier losses. The commercial question is whether customers read Nvidia as a company in a holding pattern or one with a gap at the top. Jones has promised operations, customer commitments and product roadmap will continue without interruption, and the export-control questions attached to this case will test that promise before a permanent chief is named.