Exec's exit from Overstock comes amid probe, after article
Why did a top executive of Overstock.com suddenly leave the Internet retailer after 11 years?
David Chidester resigned Jan. 20 amid an ongoing investigation of Overstock by the Securities and Exchange Commission and one day after an unflattering article about CEO Patrick Byrne appeared in The Big Money, a business Web site by the editors of Slate.
In a document filed with the SEC five days later, Overstock said only that "Chidester left by mutual agreement, effective immediately, from his position as senior vice president of internal reporting and information."
On Monday, Jonathan Johnson, president of Salt Lake City-based Overstock, added this about the departure of Chidester, the company's chief information officer and former chief financial officer:
"David had been with us over 10 years. It felt like for both David and the company it was time to move to something new.
"I don't know who said what first, but it was clearly a mutual agreement. We've grown a lot in 10 years. We are a big organization and thought it was time for both parties to move on."
Efforts to reach Chidester for comment were unsuccessful, and Byrne was unavailable.
The Big Money article, titled "America's Nastiest CEO," profiled Byrne, who it said is frequently in the news for alleged "outrageous pronouncements," especially connected with his efforts to stop naked short-selling of the company's stock and his battle with Rocker Partners, a hedge fund. Naked short-selling is a trading practice designed to drive down the price of a company's shares.
Much of the article was based on documents and internal e-mails. Some of the e-mails were exchanges between Byrne and Chidester while he was serving as CFO.
Johnson called allegations that Chidester was forced out because of the article "conjecture" that is "just wrong."
In September Overstock announced it had received notice from the SEC saying the agency was investigating the company's restatements of its finances in 2006 and 2008, as well as other matters.
On Monday, SEC spokesman Kevin Callahan said the agency doesn't acknowledge investigations unless it takes action against a company.
Chidester joined Overstock in 1999 as controller, supervising accounting and financial reporting. He was named acting chief financial officer in 2003 and promoted to vice president of finance and chief financial officer in 2004.
He moved to senior vice president of internal reporting and information in January 2009 and was replaced by Stephen Chesnut, who was appointed senior vice president of finance on the same day. Chidester supervised Overstock's internal data and information, including data reporting and cost accounting.
Chidester's compensation was $300,093 in 2008, the last year for which information is available.