MEMC Electronic chief has resigned

Nabeel Gareeb • President and CEO for 6 years, he was the area's highest-paid executive in 2007. MEMC • Company announces board member Marshall Turner will be temporary replacement.

As president and chief executive of MEMC Electronic Materials Inc. for the past six years, Nabeel Gareeb became as well-known for turning around the once-floundering company as for having a management style that was both aggressive and savvy.

But O'Fallon, Mo.-based MEMC announced Thursday that Gareeb's stint with the silicon wafer maker will end soon.

Gareeb, 44, has resigned from the company and, effective Nov. 12, will be replaced by board member Marshall Turner until MEMC hires a permanent successor, according to a statement.

The statement said little about why Gareeb, whose $79 million compensation in 2007 made him St. Louis' highest-paid executive that year, is leaving MEMC. Gareeb was quoted as saying it was the "right time for a new CEO to lead the company" into its next growth phase.

MEMC did not return several calls for comment.

But analysts speculated on the circumstances of Gareeb's resignation.

"The company's saying he's leaving voluntarily. We don't buy it," said Gordon L. Johnson II, a director at Hapoalim Securities in New York. "We think he's being pushed out."

MEMC earnings have come in lower than the company's own forecasts for the past five quarters for a series of reasons, including production problems, according to analysts.

For example, the company said in its third-quarter report last week that Hurricane Ike delayed delivery of raw materials to its Pasadena, Texas, plant and reduced production. MEMC's wafers are used in computer chips and solar cells.

Johnson said the missed targets upset investors, and Gareeb is now bearing the brunt of that frustration.

Before coming to MEMC, Gareeb worked as chief operating officer of International Rectifier, a semiconductor maker in El Segundo, Calif.

A group of investors led by private investment firm TPG, previously known as Texas Pacific Group, bought a controlling interest in MEMC in 2001, when sales had fallen to $618 million. That was a 47 percent drop from 1996, the first full year the company was public.

The firm brought in Gareeb in April 2002.

Gareeb's aggressive, savvy approach to contracts paid off, said Christopher Blansett, a senior equity analyst for JPMorgan who is based in San Francisco. While competitors signed contracts at lower prices, Gareeb and MEMC waited for demand to heighten and supply to decline.

The company "was signing contracts that were significantly more profitable than (its) competitors," and Gareeb drove that method, he added.

But he had a polarizing effect during his tenure.

"Within the investment community, he was either seen as a good steward of the business or ... as a little too promotional," said Theodore R. O'Neill, a senior analyst for Kaufman Brothers in New York.

He also garnered attention for his 2007 pay.

Last year, he cashed in stock options worth $77.7 million, on top of his base salary of $850,000 and incentive pay of $931,600. Gareeb's pay was the highest found since the newspaper began examining executive compensation in 1994, according to the Post-Dispatch's executive pay report last month.

Analysts had little information about Gareeb's interim successor, Turner.

Turner has been a member of MEMC's board since April 2007. Most recently, he served as president and chief executive of Toppan Photomasks, a Round Rock, Texas-based company that makes what are known as photomasks for semiconductor chip manufacturers.

MEMC's stock dropped to $13.88 in early morning trading Thursday but closed just 1 percent down at $16.81. Thursday's stock price is 83 percent off from MEMC's 52-week high of $96.08 set on Dec. 24.