Incoming CEO of Intel, Pat Gelsinger, will raise more than $ 100 million for his new job.
The disc maker has offered the significant incentives to lure Gelsinger away from its current role in VMware, which recently valued its annual remuneration at more than $ 42 million. Intel announced Gelsinger’s payment package on Thursday, a day after its unexpected appointment.
The vast majority of what Intel has promised Gelsinger depends on performance, so it may be worth far less if it goes bad – or even more if the company excels under its leadership.
But by any measure, it’s a huge amount of money. It’s apparently necessary to pull Gelsinger from thriving VMware and jump into a crisis situation at Intel.
Intel has lost its leading role in the chip industry over the past few years due to the succession of manufacturing failures in three consecutive generations of new microprocessors. Gelsinger, formerly Intel’s chief technology officer, will be tasked with restoring Intel’s engineering.
Intel has announced a deadline of next Thursday to announce whether it will outsource its leading manufacturing to competitors in Asia or keep the work in-house.
Although headquartered in Silicon Valley, the largest and most advanced operations are in Washington County. Intel has more than 21,000 employees in Oregon, where it designs and manufactures each new class of computer chips.
The decision to appoint Gelsinger came as a surprise because Intel promoted current CEO Bob Swan to the top job less than two years ago. Intel valued Swan’s 2019 compensation at $ 67 million, inflated by bonuses associated with its promotion. (It has not yet announced its 2020 payment.)
Gelsinger, 59, has been with Intel for 30 years and was one of the best engineers and top executives in Oregon when he left the company in 2009. He became VMware’s CEO in 2012.
Intel said on Thursday it would pay Gelsinger $ 1.25 million in base salary, a $ 1.75 million rental bonus and an annual $ 3.4 million bonus, depending on performance. If Gelsinger buys up to $ 10 million in Intel shares, the company said it would give him a corresponding number of limited shares.
In addition, Gelsinger will receive $ 100 million in limited shares – depending on Intel and its share price meet various performance metrics. So he will eventually be able to receive much less than that – or possibly even more. The limited inventory investments over a period of five years depend on Gelsinger remaining with Intel.
For 2019, Intel reported that its median employee earned $ 96,300. Swan, the outgoing CEO, was paid 695 times that amount.
– Mike Rogoway | [email protected] | twitter: @rogoway | 503-294-7699