Could Nvidia have fired him, and would it have changed the outcome?
This article reflects information available as of November 13, 2026.
A for-cause firing would have ended the same way, and the reasons reveal gaps in Nvidia’s corporate governance and employment documents.
On November 11, 2026, Nvidia’s Board of Directors (the “Board”) accepted Jensen Huang’s resignation as president, chief executive officer, and director, effective immediately.
Most coverage focuses on the circumstances of his departure. The governance questions are separate, and they trace back to two weak links: an employment model with no contract at all, and a Board that was not structured to oversee its founder. Founders of startups can read this as a story about a very large public company, but the same gaps appear in young companies every year, where they are far cheaper to fix.
Weak link #1: No employment agreement
Nvidia’s executives are at-will. According to the company’s proxy statement, Nvidia has no employment, severance, or change-in-control agreements with them. That avoided an exit payout, but it also left the Board with nothing to trade for cooperation, confidentiality, or a release of claims.
The equity result was the same whether Huang resigned or was dismissed for cause:
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- Roughly 870 million vested shares, worth about $143 billion at $165 per share, remained his property regardless of how the relationship ended; and
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- Roughly $108 million in unvested performance shares lapsed because they required continued service.
With no severance to forfeit, Nvidia had no leverage to negotiate a release in its favor. Its clawback policy applied only to a financial restatement, so personal misconduct, however serious, did not trigger it.
Weak link #2: A Board not built to oversee its founder
Huang held about 3.58% of Nvidia’s voting stock, all in a single class with no super-voting protection. Under Nvidia’s bylaws, a majority of directors could remove him as CEO at any time, with or without cause. Removal power is a different thing from oversight, and the Board’s structure shows the gap:
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- Before his exit, Nvidia had no Board chair. The Board had 11 directors, one of them an executive, and average director tenure was nearly 15 years, about twice the S&P 500 norm. On the day of the resignation, the Board named director Harvey C. Jones as its first chair.
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- Nvidia had no Chief Compliance Officer. Its Code of Conduct covered employees and directors, including relationship conflicts, but enforcement ran through HR, Legal, and managers who ultimately reported to the CEO. When the reporting line ends with the person being overseen, the control is only nominal.
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- Huang’s exit left Nvidia with an interim CEO who also serves as CFO, no named successor, a potential securities class action, and close to $500 billion in market value lost within days.
The corporate governance lesson for boards and founders
Removal powers, independent oversight, and financial remedies written into employment contracts are three distinct protections. A company needs all three, and the ability to fire a CEO supplies only the first.
What this means for startups
Early-stage companies skip these protections for understandable reasons. The team is small, the founders trust each other, and the next financing or product deadline feels more urgent. The documents are simplest to put in place early, usually when the first financing is being papered, and several of them answer the exact gaps described above.
Founder employment agreements. A written agreement gives the company something it can enforce: defined duties, a definition of “cause,” confidentiality and invention assignment obligations, and conditions attached to any severance or release. Without one, every term of a founder’s departure has to be negotiated after the relationship has already soured.
Founder equity and vesting. When founder stock vests over time and the company can repurchase unvested shares, a founder who leaves early keeps only the portion already earned.
Board structure and bylaws. Who can remove an officer, who can remove a director, and how much voting control a founder holds are choices to settle deliberately in the bylaws, the charter, and any stockholder agreements. As the company grows, so does the value of independent directors and a clear separation between the CEO and the person who chairs the Board.
Policies and reporting channels. A code of conduct is only useful if concerns can reach someone who does not report to the person involved. Companies can also write misconduct-based clawback terms into equity and bonus arrangements, which public-company policies tied to restatements generally do not cover.
Inventus Law’s startup practice covers this ground from formation through venture financing, including bylaws, board formation, stock option documentation, corporate compliance policies, and the employment and confidentiality agreements that go with them. Our global labor and employment practice handles the agreements for teams that span more than one country.
If your founders are working without written agreements, or your bylaws have not been revisited since incorporation, a short review now will cost far less than negotiating these terms after a dispute begins. Contact us at inventuslaw.com/contact or email info@inventuslaw.com.
