Intel shareholders have rejected the executive pay

Intel shareholders have rejected the executive pay

May 18, 2022: According to a regulatory filing published on Monday, Intel shareholders voted against the company’s compensation for its top executives (executive pay) in the previous week.

The vote is advisory and won’t rapidly affect the compensation of Intel’s executives but will show a signal that few Intel investors are watching the performance of CEO Pat Gelsinger and the progress of his turnaround plan for the chip giant. However, shareholders representing nearly 34% of the shares voted for the package. Of those voting, shareholders represent nearly 920 million shares voted to approve, and those representing 1.77 billion voted against it.

The vote is the recent example of shareholders voting against executive compensation packages, including hundreds of millions in company stock.

For instance, AT&T shareholders voted against an executive compensation measure in April. According to As You Sow, an activist investor group in 2021, Sixteen companies had executive pay packages rejected by shareholders.

According to a financial filing, Gelsinger took over as CEO of Intel in Feb. 2021 and received a compensation package worth $178.59 million that year. The compensation includes over $1 million in salary, a $1.75 million bonus, more than $140 million in stock awards, and almost $30 million in option awards.

Since Gelsinger took over, embarking on a mission to turn Intel around, the once-dominant chipmaker has gone behind in manufacturing and has lost market share to rival AMD. Gelsinger further said that Intel would spend heavily to build the latest chip factories. Intel will be a contract manufacturer for different chip designers and develop its chips.

Gelsinger might get a few of the equity he was awarded. The actual payouts depend on the performance stock of Intel for more than five years. In January, Intel said the payout of these awards tracks at 0% because Intel stock is trading lesser than when Gelsinger took over.

“The Compensation Committee believed having 73% of the CEO’s higher equity awards contingent on achieving ambitious stock price growth was in the great interest of Intel and its stockholders,” Intel said in its proxy filing.

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