FX168 Financial News (North America) reported that Pat Gelsinger unexpectedly resigned as CEO of intel (INTC) on Monday (December 2), ending his four-year effort to save the struggling chipmaker — and also ending his opportunity to receive a massive stock compensation worth 0.14 billion dollars.
However, Gelsinger is not empty-handed: According to an analysis written for Fortune magazine by a compensation expert, he made at least 46 million dollars during his leadership at intel, including severance pay.
According to a document from intel, Gelsinger will receive severance pay between 7 million and 10 million dollars. According to calculations from executive compensation data company Equilar, this is additional compensation beyond the 38.7 million dollars he has already received since 2021, including salary, bonuses, vested stocks, and exercised options.
The generous compensation reflects the high expectations for Gelsinger, a veteran of intel and a technology entrepreneur, who was appointed in 2021 at a time when this iconic chip manufacturer was facing one of the most severe crises in its 56-year history.
Meanwhile, Gelsinger has never received performance-based stock compensation, highlighting the challenges he faced in executing a rescue mission at intel amid a plummeting stock price and progress from competitors like Nvidia and taiwan semiconductor.
So far this year, intel's stock price has dropped by 52%, while the nasdaq index has risen by 29%. Since Gelsinger was appointed CEO in January 2021, intel's stock price has fallen by approximately 55%.
Equilar's research director Courtney Yu stated, "Due to failure to meet performance targets and the decline in intel's stock price over the past few years, his actual compensation is much lower."
According to Yu's analysis, Gelsinger's non-equity incentive plan income peaked in his first year as CEO. These performance-based rewards ranged from 5.1 million dollars in fiscal year 2021 to 945,900 dollars in 2022 and 2.9 million dollars in 2023.
A farewell filled with both joy and sorrow.
On Monday, intel announced that Gelsinger would soon retire and has appointed two interim co-CEOs to take charge while searching for a permanent CEO successor, a move that shocked Wall Street. Gelsinger, a long-time intel employee, led VMware for a decade before rejoining the company as CEO in 2021. He stated that this moment is "bittersweet" and acknowledged that it has been a challenging year.
Although intel and Gelsinger described his departure as retirement, Bloomberg reported that the 63-year-old CEO was actually forced out by the board of directors, which had grown increasingly impatient with this transition. According to intel, Gelsinger is eligible for a severance package equivalent to 18 months of his $1.25 million annual base salary, as well as 1.5 times the annual target bonus, which is set at 275% of his base salary. He is also entitled to receive 11/12 of the 2024 annual bonus.
Gelsinger’s total compensation peaked at $0.179 billion in 2021, ranking among the highest in corporate leadership. At that time, Peter Kern of expedia earned $0.296 billion, leading in Equilar’s CEO compensation study, which measured total compensation for companies in the S&P 500 index. Next was David Zaslav of Warner Bros. Discovery with $0.247 billion, followed by William McDermott of servicenow with $0.166 billion. (Gelsinger is not on the list because it only includes CEOs who have served for at least two years.)
Of course, most compensation is awarded in equity tied to performance targets. For example, Yu explained that when Gelsinger first took office, he received 2.1 million options and 3.3 million performance shares. However, these options will only vest if intel's stock price rises at least 30%—which has not happened.
"He clearly won’t gain any value from these stocks," Yu said.