Intel and Pat Gelsinger have entered into a “severance agreement” under which the now former CEO will receive significant payments. We are talking about at least $10 million, according to a report filed by the company with the US Securities and Exchange Commission (SEC).
Image source: intel.com
Under the “severance agreement,” Gelsinger is entitled to receive severance pay equal to 18 months of his base salary, which is $1.875 million. In addition, the former CEO is entitled to a payment equal to one and a half times his current bonus of 275% of base salary for 18 months, that is, another $5.16 million. The third component of the severance pay will be 11/12 of the annual bonus for 2024, which would have been paid to Gelsinger if he had not resigned a month before the end of the year – another $3.15 million. But the last payment is contingent on the company’s performance and is subject to additional conditions.
Thus, Gelsinger will receive from almost $7 million to $10.18 million. For comparison, WeWork founder Adam Neumann received $400 million upon dismissal, and the severance package of former Yahoo CEO Marissa Mayer in 2016 was $54. 9 million
This year has been difficult for Intel. In early August, the company fell by 30% due to weak financial results: the company showed a net loss of $1.6 billion, although a year earlier it had a profit of $1.5 billion. As a result, Intel was forced to lay off 15% of employees, or 15 000 people to cut costs.
Gelsinger led the company for almost four years – he was temporarily replaced by Intel CFO David Zinsner and Chief Product Officer Michelle Johnston Holthaus. The CEO was faced with a choice: to resign voluntarily or by decision of the board of directors – the latter formed a committee that would determine his permanent successor. Intel shares briefly jumped after Gelsinger’s resignation was announced, but soon returned to their original value.