Conexant’s Decker Rewarded With Stock and Option Package

The chairman of Conexant Systems Inc., the Newport Beach maker of computer chips for high-speed communications, received an annual bonus of $336,518 worth of stock as well as options to buy 1 million more shares, according to a document filed Monday with federal regulators.

There are restrictions on the stock awarded to Dwight W. Decker, who also is Conexant’s chief executive, but he could cash in roughly 250,000 shares today and pick up $13.9 million, based on his cost and Monday’s closing stock price.

His bonus and option award, along with those of other executives, were disclosed in the company’s proxy statement, which is information the Securities and Exchange Commission requires be given to shareholders before they vote on company matters.

The lucrative packages offered the executives is a reward for the dramatic return to profitability early last year, when executives were facing pay cuts. Decker himself faced a 20% reduction.

Conexant officials could not be reached for comment late Monday.

The company’s stock, which has jumped more than 660% in the past year, closed Monday at $65.06 a share, down $1.31 in Nasdaq trading.

The closing price would make Decker’s options worth nearly $65.1 million. Were he able to cash it all in, he would pay slightly more than $9.4 million for the stock and end up with a gain of nearly $55.7 million.

But, according to the proxy, Decker and the others can buy and sell their option awards only in roughly four equal annual installments, beginning today.

Decker’s salary last year also rose to $444,385, up from $357,405 the previous year.

In 1998, when Conexant was still part of then financially troubled Rockwell International Corp., Decker did not receive a bonus but did pick up options for 178,564 Rockwell shares.

The company lasted through a slump in modem chips and went from a $262.2-million loss in fiscal 1998 to a $12.9-million profit for the last fiscal year, which ended Sept. 30. Not only did the modem market recover, but, after being spun off from Rockwell, Conexant diversified its product line, adding wireless and high-speed networking chips to its product line.

With profits on the way last year, the company began awarding executives more options. Balakrishnan S. Iyer, the company’s chief financial officer, got options for 700,000 shares. Also getting hefty awards were senior vice presidents Raouf Y. Halim, for 520,000 shares, Moiz M. Beguwala, for 470,000 shares, and Lewis C. Brewster, for 400,000 shares.

The company also said in its proxy statement Monday that it is seeking to double the number of its authorized shares to 1 billion. It will ask stockholders to approve the increased number of shares at the annual stockholders meeting, scheduled for Feb. 10 in Newport Beach.

Though the company said future stock splits are not in the offing, the current 500 million authorized shares of common stock would not be sufficient for any future stock splits should its share price continue to rise, according to the proxy.

The company’s board said it “will provide Conexant with the flexibility necessary to maintain a reasonable stock price through future stock splits,” as well as added flexibility when deciding how to fund potential acquisitions, it said.

Conexant granted a 2-for-1 stock split Oct. 29 after significant increases in the market price of its common stock.

As of Dec. 14, there were about 198 million shares of common stock outstanding, the filing said.