Intel Corporation (NASDAQ:INTC) adopted a new executive compensation structure on Monday including raising the number of management employees required to own stock. Intel conveyed the changed policies to shareholders through a letter that was included in a filing with the Securities and Exchange Commission (SEC). The letter noted that these changes are a part of CEO Brian Krzanich’s efforts to bring together the financial interest of employees and shareholders.
Intel senior staff allotted retention
According to the new policy, 350 senior leaders will be required to own Intel Corporation (NASDAQ:INTC) shares from 2014 on. Before this, only 50 managers were required to hold the company’s stock.
Also, the chip maker mentioned that there will not be a ‘floor’ from now on to safeguard the value of the performance-based equity awards for its senior executives, which can drop to zero. Intel added that 50% of the company’s annual cash bonus payout for every employee will now depend on the performance; compared to 33% in fiscal 2013. Intel will now make the payouts on a quarterly basis as against the semi annual, in the past. This move will help the company to pay incentive based compensation more frequently.
Intel Corporation (NASDAQ:INTC) issued the retention to Krzanich and other senior staff members to hold on to their posts in the company during the policy shift.
“One of the top priorities of new CEO Brian Krzanich is to further strengthen our culture of accountability, engagement, and empowerment,” Intel said in the letter.
Krzanich salary dropped in 2013
In 2012, compensation given to Krzanich amounted to $15.1 million but dropped to around $9,139,597 in 2013 as per the filings of Intel. The compensation breakdown of Krzanich includes a base salary of $887,500 and a $1.75 million bonus, with the rest composed of equity compensation.
Intel Corporation (NASDAQ:INTC) has undergone major downtrends due to the shift in the market from personal computers to tablets and smartphones. In a statement made last month, Intel stated that sale of chips increased in the fourth quarter of 2013, but the demand for PCs was poor. In fiscal 2014, the company is estimating flat revenue compared to the analysts, who are expecting a slight increase.