Intel disclosed on Thursday the possible remuneration of Pat Gelsinger, who will replace Bob Swan as CEO. As it turns out, the chimpaker offered Gelsinger eye-popping incentives to lure him out of his job at VMware, which recently valued him at more than $ 42 million in annual fees.
It should be noted right away that the payment of most of the amount promised to Gelsinger by the chipmaker depends on the results that the company will achieve under his leadership. Therefore, the reward can be much less if things go wrong, or vice versa even more if the company succeeds with it. In any case, this is a lot of money. Obviously, otherwise the board of directors did not manage to induce Gelsinger to abandon the thriving VMware in order to start “sorting out” the crisis situation at Intel.
Intel said Thursday it will pay Gelsinger a $ 1.25 million base salary, a $ 1.75 million hiring bonus and a $ 3.4 million annual bonus, based on performance. If Gelsinger buys Intel shares for up to $ 10 million, the company will provide him with an equal number of limited-sale shares.
In addition, Gelsinger could receive another $ 100 million in limited-sale shares. The size of the package will depend on how much Intel’s performance and the price of its shares grow. So in the end, he can get much less, or potentially even more than this amount. The limited shareholding will pass to Gelsinger in five years, provided he remains at Intel.
Intel has lost its leadership in the chip industry over the past few years due to a string of manufacturing disruptions, and Gelsinger, Intel’s former chief technology officer, has been entrusted with restoring its technological edge. Intel has cited next Thursday as a deadline when it will be announced whether it will outsource its manufacturing to competitors in Asia or make the chips in-house.
The decision to hire Gelsinger came as a surprise to many, as Intel appointed Bob Swan as CEO less than two years later. Intel valued Swan’s compensation for 2019 at $ 67 million, which was bumped up with bonuses related to his promotion. (His salary in 2020 has not yet been disclosed.) In 2019, Intel reported that the average income of its employee is $ 96,300. Accordingly, the already former CEO Swan received a remuneration in 2019 695 times that amount.
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