New York – Pat Gelsinger’s time as CEO of Intel may have been marred by significant challenges, but his exit from the tech giant is far from underwhelming. With the announcement of his resignation in December 2023, Gelsinger is set to walk away from Intel with a hefty severance package that reflects his high-ranking position and the tumultuous period under his leadership.
Intel’s filing with the Securities and Exchange Commission revealed that Gelsinger would receive a severance worth at least $10 million. This includes 18 months of his base salary, which stands at $1.25 million annually. As a result, Gelsinger is guaranteed a payout of $2.25 million just from his salary alone. On top of this, Gelsinger’s compensation package includes a bonus of 1.5 times his current target bonus, which amounts to 275% of his base salary, or around $3.4 million. This bonus will be paid out over the next 18 months, bringing his total severance to more than $5.6 million.
In addition to these cash benefits, Gelsinger holds an impressive stock portfolio, with approximately 646,000 shares in Intel, which, at current market prices, are valued at over $14.5 million. This makes his total financial package from Intel exceed $20 million, a figure that stands as a testament to his long tenure with the company and the compensation structure for top executives at major tech firms.
Gelsinger took the reins as Intel’s CEO in February 2021, with the company struggling to maintain its dominance in the semiconductor market. Once a leader in chip manufacturing, Intel was faced with rising competition from companies like AMD, Nvidia, and even newer players like Apple, which quickly embraced cutting-edge technologies like artificial intelligence (AI). Despite billions in government incentives aimed at revitalizing Intel’s domestic chip manufacturing, Gelsinger was unable to navigate the company through the shifting tech landscape.
Under Gelsinger’s leadership, Intel’s stock price experienced a dramatic decline, losing more than 60% of its value. This fall was attributed to several factors, including a failure to capitalize on the booming AI market, where rivals like Nvidia flourished. Meanwhile, Intel was grappling with production delays and internal struggles, including difficulties in meeting the growing demand for chips in emerging sectors such as AI and cloud computing.
Despite his previous success as the CEO of VMware and his experience as Intel’s Chief Technology Officer, Gelsinger could not bring Intel back to its former strength. The company faced internal production issues, significant competition, and technological missteps that left it playing catch-up. Moreover, Intel struggled to regain talent, with top engineers and executives leaving the company, further affecting its ability to innovate and compete.
The financial challenges of Gelsinger’s tenure also led to significant workforce reductions. In August 2023, Intel announced plans to lay off 15% of its global workforce, aiming to reduce operational costs by $10 billion. The company’s struggles were further compounded by its inability to break into key technology sectors that were rapidly growing, particularly AI, where competitors had surged ahead.
Despite these setbacks, Gelsinger’s severance package highlights the level of compensation executives at companies of Intel’s size are entitled to, even when their leadership results in mixed outcomes. His departure signals the end of an era for the company, which now faces the challenge of finding a new leader who can steer it toward recovery. Gelsinger’s exit, complete with a substantial financial package, paints a picture of a CEO whose time at the helm was difficult yet financially rewarding.
