New York – Intel’s decision to part ways with CEO Pat Gelsinger in December 2023 marked the end of a turbulent chapter for the company. While Gelsinger’s time at the helm was fraught with difficulties, his departure is not without substantial financial reward. His exit package, disclosed in a filing with the Securities and Exchange Commission, reveals just how much Intel is paying for his leadership, despite the significant challenges that led to his ousting.
According to the filing, Gelsinger is entitled to 18 months of his base salary, which amounts to $1.25 million annually. This ensures that he will receive a payout of $2.25 million from his base salary alone. On top of this, Gelsinger will be awarded 1.5 times his current target bonus, which stands at 275% of his base salary. This bonus, worth around $3.4 million, will be paid over the same 18-month period as his salary. Together, these payments bring Gelsinger’s severance to more than $5.6 million.
In addition to the salary and bonus, Gelsinger owns approximately 646,000 shares in Intel, which, as of November 2023, are valued at over $14.5 million. When factoring in the value of his stock holdings, Gelsinger’s total payout from Intel could exceed $20 million, a sum that highlights the lucrative nature of top executive contracts in the tech industry. For a company facing significant financial difficulties, such an exit package is a reminder of the high stakes involved in leading a major tech firm.
Gelsinger’s tenure at Intel began in February 2021, during a period when the company was already under pressure from increasing competition. Intel had been the dominant force in the semiconductor market for decades, but by the time Gelsinger assumed the CEO role, the company was struggling to maintain its leadership. The rise of rivals such as AMD, Nvidia, and Apple, who were quick to embrace emerging technologies like artificial intelligence (AI), put Intel on the backfoot. Despite Gelsinger’s leadership, Intel was unable to recover its competitive position.
Under Gelsinger’s guidance, Intel’s stock price took a dramatic plunge, falling by over 60% during his tenure. The company’s inability to innovate quickly enough to meet the demands of a rapidly changing tech landscape was one of the key reasons behind this decline. While competitors such as Nvidia saw their fortunes rise with AI-driven demand for chips, Intel was left behind, unable to capitalize on this lucrative sector.
Beyond the stock price struggles, Gelsinger also faced major internal issues at Intel, including production delays and a loss of key talent. These factors further compounded Intel’s challenges, as the company struggled to meet market demands and keep pace with its competitors. Although billions of dollars in government funding had been earmarked to help revitalize Intel’s domestic manufacturing, these funds were not enough to reverse the company’s fortunes under Gelsinger.
One of the more dramatic outcomes of Intel’s financial difficulties was the announcement of significant layoffs in 2023. In August, the company revealed that it would be cutting 15% of its workforce as part of an effort to reduce costs by $10 billion. The move reflected the tough financial realities facing Intel, as Gelsinger’s leadership had not been able to steer the company toward long-term success.
While Gelsinger’s leadership may be remembered as a period of missed opportunities for Intel, his severance package underscores the financial rewards that come with being at the top of a global tech company. His departure, paired with the financial realities of executive compensation, highlights the disconnect between performance and pay in the tech industry. As Intel searches for a new leader to guide it through the next phase of its transformation, Gelsinger’s exit is both a financial windfall for him and a reflection of the struggles that have defined his time as CEO.
