News Intel’s new CEO gets a $1 million salary plus $68 million in bonuses

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Time will tell how great a decision it was to have removed Papa Pat. Also this article states
"Tan also gets stock options worth $9.6 million and a new hire option grant of $25 million."

and later contradicts itself with

"Tan is not also given stock options and a new hire option grant—"

I'm guessing it's just a typo mistake to have included "not" in the second quoted section.
 
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That’s a lot of money to just not suck.

They should be paid bonus based on the company health. Negative, zero bonus, positive, then bonus (if the previous year was not negative).
 
Heiro78 said:
Time will tell how great a decision it was to have removed Papa Pat. Also this article states
"Tan also gets stock options worth $9.6 million and a new hire option grant of $25 million."

and later contradicts itself with

"Tan is not also given stock options and a new hire option grant—"

I'm guessing it's just a typo mistake to have included "not" in the second quoted section.
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I think it was a mistake. Investors were too impatient, and will pay the price in the long-term. Just like it took 15ish years to lose process leadership, it would have taken at least that long - staying the course - to win it back. Lip-Bu Tan's philosophy seems to be that of the aggressive cost-cutter, seeking profitability through layoffs and cutting benefits.

And that might be the way to go if you are in a commodity business where any profit to be made is at the margins, but I just don't see US-based Intel competing successfully as the "cheap" fab option. Intel's only shot at long-term success was to return to being on top, where they could command higher prices/profit. And that means a different set of marching orders than cost-cutting/austerity - I think they needed a CEO who would work hard to scrounge up the funds and preach a hopeful message, while going all-in on R&D, and a focus on returning to being elite.
 
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lmcnabney said:
His bonuses are earned by just keeping Intel's share price from dropping. Not to recover or grow, just to keep the company solvent. Talk about low standards.
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The stock options are worth nothing unless the price goes up. If he wants to make money from his stock options, he absolutely does have to make the company better. Just keeping the company solvent, won't achieve that.
 
phead128 said:
His base salary and bonus is significantly less than Pat Gelsinger's, and his stock options are tied to company performance milestones, so no freebies.
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I feel this may sound like a great idea, but in general, it is ineffective. A CEO's compensation can be tied to the performance of the company by giving him/her stock or options, but at the end of the day, as long as they keep it alive or prevent a massive erosion of value, they will eventually still get paid. And to "keep it alive" or prevent massive loss in value, you just have to cut cost and do little to change the actions required to grow the company. And this is what we normally observe where CEOs are hired and fired, but still get paid a handsome amount of money for their "golden handshake/ parachute". And after that, another will take over and do the same. It sounds like "passing a bomb" and see in whose hands will it blow up eventually.

In my opinion, I feel at least Pat tried to do something to grow the company, though I am not in agreement with the plan to focus on the foundry business because it is clearly a burden to them since they started falling behind during the transition from 14nm.
 
The article said:
Tan will also receive a long-term equity grant of $14.4 million and a performance grant of $17 million (both in Intel shares) to be paid over five years if Intel’s stock doesn’t drop over the next three years. Tan also gets stock options worth $9.6 million and a new hire option grant of $25 million.
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The stock portion of his compensation is where the real money is - especially given how low Intel's share price is, right now. However much he (or external factors) can boost their share price, these amounts will increase by roughly the same ratio.
 
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timsSOFTWARE said:
I think it was a mistake. Investors were too impatient, and will pay the price in the long-term. Just like it took 15ish years to lose process leadership, it would have taken at least that long - staying the course - to win it back. Lip-Bu Tan's philosophy seems to be that of the aggressive cost-cutter, seeking profitability through layoffs and cutting benefits.
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Is this based on his long track record while heading Cadence, or just the email he sent?
 
spongiemaster said:
The stock options are worth nothing unless the price goes up. If he wants to make money from his stock options, he absolutely does have to make the company better. Just keeping the company solvent, won't achieve that.
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Right now, the company is not profitable. If he can't fix that, it's game over (i.e. "fire sale" scenario).

srdscCr2PErN4vct4zkiJf.png


https://www.tomshardware.com/pc-com...sses-clearwater-forest-pushed-back-to-1h-2026
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Its guidance doesn't project a quick turn-around, either.
 
2024 was a terrible year, and despite having positive annual gross profit for that year and each year for the decade prior, 2024 marked the first year that they had a negative annual net income. One year does not destroy a company but it sure did fall hard. It's certainly easier to fall than to climb. Good luck Tan!
 
bit_user said:
Right now, the company is not profitable. If he can't fix that, it's game over (i.e. "fire sale" scenario).
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srdscCr2PErN4vct4zkiJf.png
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Its guidance doesn't project a quick turn-around, either.
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Jesus Christ, Henry!
125% tax rate...
bit_user said:
Right now, the company is not profitable. If he can't fix that, it's game over (i.e. "fire sale" scenario).
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The company is profitable, just not that profitable that they can build fabs and still have a big net income.
They will not keep spending ~25bil per year on FABs forever...
2020
Property, plant and equipment, net 56,584
2024
Property, plant and equipment, net 107,919
 
TerryLaze said:
The company is profitable, just not that profitable that they can build fabs and still have a big net income.
They will not keep spending ~25bil per year on FABs forever...
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The thing is, they actually do need to continue spending quite a lot, if they're going to stay in the fab game. That's the problem.

This performance just shows why they need to attract external customers. Otherwise, they need to cut the fabs loose, so they don't drag down the rest of the company with them.
 
bit_user said:
The thing is, they actually do need to continue spending quite a lot, if they're going to stay in the fab game. That's the problem.

This performance just shows why they need to attract external customers. Otherwise, they need to cut the fabs loose, so they don't drag down the rest of the company with them.
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Not 25bil a lot.
Also they will start to make products in those FABs, which maybe they are going to sell.......
 
TerryLaze said:
Not 25bil a lot.
Also they will start to make products in those FABs, which maybe they are going to sell.......
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To stay in the game, they need to continue investing in new nodes & fabs. If they stop doing that, it'll be enough to generate short-term profits, but at the expense of shooting themselves in the foot, again. It will basically lock them into a course of going fabless.
 
bit_user said:
To stay in the game, they need to continue investing in new nodes & fabs. If they stop doing that, it'll be enough to generate short-term profits, but at the expense of shooting themselves in the foot, again. It will basically lock them into a course of going fabless.
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They have been doing that since the 1970's what's your point?
This large of an expansion was a one off, doubling their size in 4 years, they didn't just modernize their current FABs this time, they build a bunch of new additional ones.
 
TerryLaze said:
They have been doing that since the 1970's what's your point?
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Fabs & new nodes are getting more expensive, which is why it's costing more, to the point where it's actually worse for them to make their own silicon, if they can't scale volume larger.

TerryLaze said:
This large of an expansion was a one off, doubling their size in 4 years, they didn't just modernize their current FABs this time, they build a bunch of new additional ones.
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It's not a one-off, unless they're going to scale back down again, but node R&D would kill them if they did that. If they're going to continue at this scale (which they've decided they need to do), then they need to be making expenditures at this scale. The only way to support that is by bringing in external fab customers, although that hasn't occurred to the extent necessary.

The fabs are currently a liability, not a strength. They only chance they have of changing that is by making the IFS play a success.
 
bit_user said:
Fabs & new nodes are getting more expensive, which is why it's costing more, to the point where it's actually worse for them to make their own silicon, if they can't scale volume larger.
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Yeah, I wonder why they build additional FABs....and why they are going to fill them with low-ish cost low-ish size CPUs/GPUs and maybe also big size AI GPUs.

bit_user said:
It's not a one-off, unless they're going to scale back down again, but node R&D would kill them if they did that.
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The expansion is a one off, either it's done with 18A or not but they will not keep expanding for ever.
After the expansion it will be business as usual where they will decommission older FABs or re tool them for newer nodes, the same as they have been doing for more than 50 years.
bit_user said:
The fabs are currently a liability, not a strength. They only chance they have of changing that is by making the IFS play a success.
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Yes, because currently they are not even producing yet.

Every company has to be hating money to not take the opportunity to make more product and thus more money.
Stockholders and boards will not allow companies to not use intel fabs.
 
Rob1C said:
If you compare the CEOs Pat is more qualified than Lip, but a bit less than Lisa:

https://en.wikipedia.org/wiki/Pat_Gelsinger

Lip-Bu Tan - Wikipedia

en.wikipedia.org en.wikipedia.org
https://en.wikipedia.org/wiki/Lisa_Su
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Some people have made a case that Lisa's blind spot has been software. Particularly concerning their trouble penetrating the AI market.

I don't know if Geslinger deserves credit, or if it's more of an institutional thing, but Intel seems to have done a better job on executing their oneAPI strategy (though, not perfect) and is just mainly flubbing the ball on AI training hardware. That said, the launch of their Alchemist GPUs (i.e. poor driver quality) stands out as quite a debacle, although one that probably did more damage in PR and brand reputation than to the actual bottom line of the business. So, I guess Gelsinger's track record on software isn't exactly perfect.

Since Tan spent so long at Cadence, hopefully he has a better grounding in software.
 
TerryLaze said:
The expansion is a one off, either it's done with 18A or not but they will not keep expanding for ever.
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They put a lot of their new fabs on hold. The ones in Germany and Ohio stand out in my mind, but I'm not sure if there are others. So, for them to continue scaling as planned, those remaining expenditures will still need to happen.

Also, not all fab construction is establishing new campuses, but sometimes expanding existing campuses.
 
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