Pat Gelsinger, Intel’s recently retired CEO, may receive over $10 million in severance compensation
Today, Intel and Gelsinger executed a “retirement and separation agreement” that will grant the former CEO a payment equivalent to 18 months of his base compensation of $1.25 million, which is equivalent to $1.875 million.
This information was submitted to the Securities and Exchange Commission (SEC) today. Furthermore, he will receive 1.5 times his current target bonus, which is equivalent to 275% of his base compensation, resulting in a total of $5.16 million. Both of these payments will be processed through payroll over 18 months.
In addition, Gelsinger will receive a pro-rata payment that is equivalent to 11/12ths of his 2024 annual bonus, which amounts to approximately $3.15 million.
Nevertheless, this is contingent upon the performance of the company and is subject to additional criteria. Therefore, Gelsinger will be leaving with a minimum of $7 million and the potential to earn $10.18 million.
For instance, Adam Neumann, the founder of WeWork, received an exit compensation exceeding $400 million, while Marissa Mayer, the former CEO of Yahoo, received $54.9 million in 2016.
Intel has experienced a bleak year, as its valuation plummeted by approximately 30% in early August due to subpar financial results.
The company disclosed a net loss of $1.6 billion, a far cry from the $1.5 billion it earned the previous year. As a result, Intel reduced its workforce by 15%, or 15,000 employees, in order to reduce expenses.
After nearly four years in the position, Gelsinger resigned on December 1. He was succeeded by co-CEOs David Zinsner and Michelle Johnston Holthaus, who had previously served as CFO and GM of Intel’s client computing group, respectively.
Yesterday, Bloomberg reported that Gelsinger was presented with the choice of retiring or being terminated. As a result, the Intel board of directors has established a committee to identify a permanent replacement for Gelsinger.
The news of Helsinger’s departure initially caused a surge in Intel’s shares; however, they subsequently stabilized at approximately the same level as they were prior to the announcement.
This may be indicative of the ongoing uncertainty surrounding the chip giant’s future as it continues to transition to a foundry chip manufacturing model.