Pat Gelsinger’s surprise resignation from the position of CEO of Intel on Monday ends his four-year effort to save the struggling chipmaker — and his chance to grab a big stock payout that could have been worth $140 million.
Gelsinger isn’t leaving empty-handed, though: He earned at least $46 million, including severance, during his time leading Intel, according to an analysis for Wealth by a fee specialist.
Gelsinger should receive between $7 million and $10 million in severance pay, according to Intel’s filing. That’s on top of the $38.7 million in compensation he’s already earned through 2021, which consists of salary, bonuses and vested stock and stock options exercised, according to calculations by executive compensation data firm Equilar.
The large salary package reflects the high hopes placed in Gelsinger, an Intel veteran and tech entrepreneur, who has been tapped in 2021 to revive the fortunes of the iconic chipmaker in the midst of one of the worst crises in its 56-year history.
The pay Geslinger never earned in the form of performance-based stock, meanwhile, highlights the difficulties he faced in carrying out his rescue mission while Intel’s stock has been falling, and competitors love it Nvidia and TSMC have thrived.
Intel shares are down 52% so far this year, compared with a 29% gain for the Nasdaq. Intel shares have fallen roughly 55% since Gelsinger was named CEO in January 2021.
“His realized pay is much lower due to missing performance targets and the decline in Intel’s stock price over the past few years,” according to Courtney Yu, director of research for Equilar.
According to Yu’s analysis, Gelsinger’s income from non-equity incentive plan payments peaked during Gelsinger’s first year as CEO. Those performance-based awards ranged from $5.1 million in fiscal year 2021, to $945,900 in 2022 and $2.9 million in 2023.
Bittersweet goodbye
Intel shocked Wall Street on Monday when it made the announcement Gelsinger was retiring and that he appointed two interim co-CEOs to steer the ship while he conducted a search for a permanent CEO replacement. Gelsinger, an Intel veteran who spent a decade leading VMWare before rejoining the company as CEO in 2021, said in a statement that the moment was “bittersweet” and acknowledged a challenging year.
While Intel and Gelsinger described his move as a retirement, Bloomberg reported that the 63-year-old chief executive was actually pushed by the board, which was growing increasingly impatient for a turnaround. According to Intel, Gelsinger is entitled to 18 months worth of severance pay per year base salary of $1,250,000as well as 1.5 times his target annual bonus, which is set at 275% of his base salary. He is also entitled to 11/12 of his annual bonus for 2024.
On his own a peak of $179 million In 2021, Gelsinger’s total compensation package was among the highest for corporate leadership. At the time, Expedia Group’s Peter Kern was earning $296 million, surpassing Equilar A Study of CEO Paywhich measures total compensation for the S&P 500. Next up was David Zaslav of Warner Bros. Discovery at $247 million, followed by ServiceNow’s William McDermott with $166 million. (Gelsinger was not on the list because it only included CEOs who had been on the job for at least two years).
Of course, much of that compensation was in the form of equity tied to performance goals. For example, Gelsinger received 2.1 million options and 3.3 million stock units when he started, Yu explains. But they would only be eligible if Intel’s stock price rose at least 30% – something that hasn’t happened.
“He obviously won’t see any value in it,” Yu said.
