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Future Intel CEO Pat Gelsinger is expected to raise more than $ 100 million for his new job.
The chipmaker has offered mind-boggling incentives to steer Gelsinger away from his current role as head of VMware, which recently valued his annual compensation at over $ 42 million. Intel unveiled Gelsinger’s salary package on Thursday, a day after his unexpected hiring.
The vast majority of what Intel promised Gelsinger hinges on performance, so it could be worth a lot less if things go wrong – or even more if the company excels under its leadership.
Either way, however, it’s a huge amount of money. This is obviously what it took to push Gelsinger away from booming VMware and jump into a crisis situation at Intel.
Intel has lost its leadership role in the chip industry in recent years following a succession of manufacturing failures over three consecutive generations of new microprocessors. Gelsinger, Intel’s former chief technology officer, will be tasked with restoring Intel’s engineering edge.
Intel has announced next Thursday’s deadline to announce whether it will outsource its advanced manufacturing to competitors in Asia or keep that work in-house.
Although based in Silicon Valley, its largest and most advanced operations are in Washington County. Intel employs more than 21,000 in Oregon, where it designs and manufactures every new class of computer chips.
The decision to hire Gelsinger came as a surprise as Intel promoted current CEO Bob Swan to the most senior position less than two years ago. Intel valued Swan’s 2019 compensation at $ 67 million, which was inflated by bonuses associated with his promotion. (He has yet to reveal his payroll for 2020.)
Gelsinger, 59, spent 30 years at Intel and was among its top engineers and executives in Oregon when he left the company in 2009. He became CEO of VMware in 2012.
Intel announced Thursday that it will pay Gelsinger $ 1.25 million in base salary, a hiring bonus of $ 1.75 million and an annual bonus valued at $ 3.4 million, according to performance. If Gelsinger purchases up to $ 10 million of Intel shares, the company has said it will give him an equivalent number of restricted shares.
In addition, Gelsinger is expected to receive $ 100 million in restricted stock – subject to Intel and its share price meeting various performance measures. So he may ultimately receive much less than that – or, potentially, even more. The restricted stock vests over a five-year period, subject to Gelsinger staying with Intel.
For 2019, Intel reported that its median employee made $ 96,300. Swan, the outgoing CEO, was paid 695 times that amount.
– Mike Rogoway | [email protected] | Twitter: @rogoway | 503-294-7699
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