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Intel’s newly departed CEO Pat Gelsinger could be walking away with more than $10 million in severance pay.
As per a filing with the Securities and Exchange Commission (SEC) today, Intel and Gelsinger entered into a “retirement and separation agreement” which will entitle the former CEO to a payment equal to 18 months of his base salary of $1.25 million, which equates to $1.875 million. Additionally, he will receive 1.5 times his current target bonus, which is 275% of his base salary — this works out at $5.16 million. Both these payments will be made over an 18-month period through payroll.
But on top of that, Gelsinger will receive a pro-rata payment that’s equal to 11/12ths of his 2024 annual bonus, which works out at around $3.15 million. However, this is based on company performance and has additional conditions. So in total, Gelsinger will be exiting with $7 million at the very least, with the potential to hit $10.18 million.
For comparison, WeWork founder Adam Neumann bagged an exit package worth well over $400 million, while Yahoo’s former CEO Marissa Mayer left with $54.9 million in 2016.
It has been a dismal year for Intel, as the chip giant saw its valuation drop by some 30% in early August off the back of poor financial results — the company revealed a net loss of $1.6 billion versus a profit of $1.5 billion over the previous year. Consequently, Intel laid off 15% of its workforce — 15,000 people — to cut costs.
Gelsinger’s departure, effective December 1, came after nearly four years in the hotseat, and he’s replaced by co-CEOs David Zinsner and Michelle Johnston Holthaus, who had hitherto served as CFO and GM of Intel’s client computing group, respectively. According to a Bloomberg report yesterday, Gelsinger was given the option of retiring, or face the sack, and the Intel board of directors has now formed a committee to identify a permanent replacement for Gelsinger.
Intel’s shares initially surged on news of Helsinger’s departure, however they later settled at roughly the same figure they’d been before the announcement — a sign, perhaps, of the continuing uncertainty around the chip giant’s future as it continues its transition to a foundry chip manufacturing model.
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