Reflections on Reyes

1:10 PM -- Greg Reyes is about to hit another milestone -- if it doesn't hit him first. If federal prosecutors have their way, the former CEO of Brocade Communications Systems Inc. (Nasdaq: BRCD) may become the first person to face criminal charges in the stock-options scandal rippling through corporate America. (See Vendor Options Draw SEC Scrutiny.) Reyes could also face civil charges from the SEC, according to today's Wall Street Journal.

No one is guilty until convicted, of course, and Reyes's lawyers insist he acted for others, not himself. Still, Reyes makes an admirable poster boy for corporate financial diddling.

If he wasn't previously known for his arrogance, his actions as ex-CEO would prove him worthy of the rep. As he departed the executive suite under a cloud early in 2005, he signed to earn $910,000 in base pay for the coming year -- an 8 percent salary raise. (See 2005 Top Ten: Executive Payouts and Ex-CEOs Cash In.) Then he drew the wrath of the board yet again by failing to produce results for his rich "consulting" fees. (See Brocade Blasts 'Consultant' Reyes.)

Nonetheless, the question must be asked: Was Reyes alone to blame? No public CEO acts without the approval of his or her board, and in this case, the board waited a long time to rein in Reyes. His fate should give them -- and other firms' boards and shareholders -- pause. Reyes's reckoning, if it comes, must be shared in spirit if not in cold, hard penalties. That's something we've yet to see in the post-Ebbers/WorldCom world, and it's well overdue.

Mary Jander, Site Editor, Byte and Switch