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Intel’s ex-CEO Pat Gelsinger set to web greater than $10M in severance pay

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Intel’s newly departed CEO Pat Gelsinger may very well be strolling away with greater than $10 million in severance pay.

As per a submitting with the Securities and Exchange Commission (SEC) right this moment, Intel and Gelsinger entered right into a “retirement and separation settlement” which is able to entitle the previous CEO to a cost equal to 18 months of his base wage of $1.25 million, which equates to $1.875 million. Additionally, he’ll obtain 1.5 instances his present goal bonus, which is 275% of his base wage — this works out at $5.16 million. Both these funds can be remodeled an 18-month interval by way of payroll.

But on prime of that, Gelsinger will obtain a pro-rata cost that’s equal to 11/12ths of his 2024 annual bonus, which works out at round $3.15 million. However, that is primarily based on firm efficiency and has extra circumstances. So in whole, Gelsinger can be exiting with $7 million on the very least, with the potential to hit $10.18 million.

Troubled instances

It has been a dismal 12 months for Intel, because the chip big noticed its valuation drop by some 30% in early August off the again of poor monetary outcomes — the corporate revealed a web lack of $1.6 billion versus a revenue of $1.5 billion over the earlier 12 months. Consequently, Intel laid off 15% of its workforce — 15,000 individuals — to chop prices.

A $10 million payout for the CEO of a $103 billion firm may very well be deemed on the low aspect, although it’s price noting that Intel’s market cap was nicely over double that when Gelsinger took to the helm in 2021. That stated, WeWork founder Adam Neumann bagged an exit package deal price nicely over $400 million, whereas Yahoo’s former CEO Marissa Mayer left with $54.9 million in 2016, each leaving their respective firms in hassle on the time.

Gelsinger’s departure, efficient December 1, got here after almost 4 years within the hotseat, and he’s changed by interim co-CEOs David Zinsner and Michelle Johnston Holthaus, who had hitherto served as CFO and GM of Intel’s consumer computing group, respectively. According to a Bloomberg report yesterday, Gelsinger was given the choice of retiring, or face the sack, with the Intel board of administrators now forming a committee to determine a everlasting substitute.

Intel’s shares initially surged on information of Helsinger’s departure, nevertheless they later settled at roughly the identical determine they’d been earlier than the announcement — an indication, maybe, of the persevering with uncertainty across the chip big’s future because it continues its transition to a foundry chip manufacturing mannequin.

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