Intel Corportion CEO’s Total Compensation Fell 40% In 2013

Intel Corportion CEO’s Total Compensation Fell 40% In 2013
By The original uploader was VD64992 at English Wikipedia [Public domain], via Wikimedia Commons

Intel Corporation (NASDAQ:INTC) CEO Brian Krzanich’s total compensation fell from $15.9 million in 2012 to $9.6 million last year due to a one-off payment from before he was named CEO. His base salary and stock options both increased in 2013, on the back of a mostly positive year for shareholders. At $26.3, Intel is currently up 29.92% over the last 52 weeks, compared to 33.54% growth for the NASDAW over the same period.

Krzanich and others paid to stay after Otellini left

When former Intel Corporation (NASDAQ:INTC) CEO Paul Otellini announced that he was retiring in November 2012, analysts saw it as a short-term challenge but a good sign that the company was looking to move beyond its traditional dominance of the PC chip market and fight for market share in the growing mobile space. At the time, a number of key executives, including Krzanich, were given large stock awards as incentives to stick around so that they could be considered as CEO candidates, reports Erin McCarthy and Don Clark for The Wall Street Journal. Making sure that executives didn’t jump ship during the transition must have been nice as well.

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Krzanich’s base salary increased from $700,000 in 2012 to $887,500 in 2013, and his stock options increased from $883,500 to $1.3 million. Stock awards fell from $12.4 million to $5.3 million, now that Krzanich is already at his post as CEO and getting normal compensation.

Intel struggling with margin pressure, transition to mobile

Intel Corporation (NASDAQ:INTC) was able to ride the 2013 bull market, but doubts still remain about its long-term prospects. PC sales have been falling since 2011, and Intel could lose ground to Advanced Micro Devices, Inc. (NYSE:AMD). It has an incredible 96% market share in the server market, but its main strength is in process and manufacturing, moving from 14nm node to 10nm when everyone else is stuck at 20nm. This has come at the cost of outsized capex, growing from $5.2 billion to $11 billion last year, and high levels of depreciation.

Meanwhile Intel Corporation (NASDAQ:INTC) hasn’t made much headway into the mobile chip market, which is the biggest source of growth for the industry. Intel isn’t a company in crisis, but it is struggling to find a place for itself in the new IT world. Intel CEOs usually have a tenure of 7 – 8 years, so that gives Krzanich roughly another six to put his company on the path of sustained growth.

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