News Intel ex-CEO Gelsinger and his CFO slapped with lawsuit over Intel Foundry disclosures — plaintiffs demand Gelsinger surrenders his entire salary e...

[Admin]

The plaintiffs seek the entire sum of Gelsinger's $207 million salary that he earned during his tenure, which would then be paid back to Intel.

Intel ex-CEO Gelsinger and his CFO slapped with lawsuit over Intel Foundry disclosures — plaintiffs demand Gelsinger surrenders his entire salary e... : Read more

 

[-Fran-]

Hm... Well, this escalated quickly.

I wonder if this will even move forward, since how can you prove they actually withheld information in the reports? It's not like they would personally verify everything by themselves and only report on what they can gather? Will this force a deeper investigation, turning it into a witch hunt of sorts?

Definitely not what Intel needs right now, for sure. I wonder who will even want to try to steer the ship in this climate.

Regards.

 

[Elusive Ruse]

The hits keep coming, I feel worried for Intel but maybe a better Intel rises up once they are done facing the consequences of the missteps of the past years.

 

[watzupken]

In my opinion, the state of Intel’s foundry business was probably very bad when Pat took over in 2021. His 3 years tenor can’t do that much damage in my opinion. Intel’s fab was clearly in a very bad shape being stuck on 14nm for half a decade and falling behind TSMC. So if they want to seek the culprits, then every Intel CEO for the past decade likely contributed to this mess.

 

[phead128]

In my opinion, the state of Intel’s foundry business was probably very bad when Pat took over in 2021.

Intel quit the foundry business in 2018. Pat Gelsinger attempted to revitalize the foundry business (again) in 2021, with IDM 2.0 strategy for tech leadership.

His 3 years tenor can’t do that much damage in my opinion.

He was there for 4 years (3 years, 10 months), just in time for his "5 Nodes in 4 Years" timeline to mature.

Intel’s fab was clearly in a very bad shape being stuck on 14nm for half a decade and falling behind TSMC. So if they want to seek the culprits, then every Intel CEO for the past decade likely contributed to this mess.

I think Pat needs to held to "5 Nodes in 4 Years (5N4Y)" timeline he professed, given he served for 4 years. Cancelling nodes outright (20A) and gaslighting about true health (18A) is why he has partial responsibility.

‘You have an unlimited budget, and you are going to deliver five nodes in four years. We are going to get back to unquestioned process leadership.’
- Pat Gelsinger, Oct 4, 2022

If the qualifications to become Intel CEO is just giving "unlimited budgets" to engineers and promising ridiculous 5N4Y timelines, then maybe even I can become Intel CEO one day.

 

[Roland Of Gilead]

That anybody can or should earn 207m over a 3 year period is just gross in of itself. Nobody is worth that. Specially not someone who stood over Intel's run in the last 3 years. Very poor showing from Intel and Pat. But, we can't forget about the board either. The same board that sacked Gelsinger are also complicit in the bad choices of the last few years. I wonder how much they earn?

 

[Roland Of Gilead]

I think Pat needs to held to "5 Nodes in 4 Years (5N4Y)" timeline he professed, given he served for 4 years. Cancelling nodes outright (20A) and gaslighting about true health (18A) is why he has partial responsibility.

Agree with you there buddy 👍

 

[Co BIY]

How much Intel stock does this group own ?

Even perfect management cannot prevent a shareholder lawsuit in a public company ? Musk was sued despite incredible gains to shareholders.

A claim does not need to be credible to be filed.

 

[jg.millirem]

I worked as an engineer at Intel Oregon from 2017 to 2019, in the era of endless 14nm and failed Cannonlake and the horny CEO then the bean counter CEO (but hey we all got a t shirt for the 50th anniversary), and I can report a feeling of constant dismalness. The environment probably got even worse after that.

 

[why_wolf]

If this were true shouldn't they be pushing a board motion to immediately remove David Zinsner since he was the CFO (the person actually in charge of creating the financial reports) and is now co-CEO.

Since the lawsuit is alleging they lied, in what world would it be acceptable for him to continue working at Intel in any capacity?


Honestly though this sounds kinda like BS. Everyone knew Intel Foundry was performing badly and was in a Hail-Mary race to get back to competitive position.

 

[will_i_am]

Yeah, Patt got pushed out because they lost to much money and this time it was to much and they are angry. It's so obvious. They don't understand these things take time. Makes me angry. "ReVeNuE mUsT aLwAyS gO uP".

 

[King_V]

In my opinion, the state of Intel’s foundry business was probably very bad when Pat took over in 2021. His 3 years tenor can’t do that much damage in my opinion. Intel’s fab was clearly in a very bad shape being stuck on 14nm for half a decade and falling behind TSMC. So if they want to seek the culprits, then every Intel CEO for the past decade likely contributed to this mess.

Though, it does make me wonder if pressure from shareholders also led to this. Investing in the future costs money. Maybe investors, in a short-sighted way, pressured Intel to just sit on its laurels and ride out the years doing the bare minimum, making profits on incremental performance increases, then were caught flat-footed when Ryzen arrived.

Not basing this on any knowledge I have, just guessing, because it usually seems like investors and the market are more interested in how much they can get by next quarter, and long-term health of the company be damned.

Took me a little by surprise that there's actually an investment group that cares about long term.

EDIT: fighting with autocorrect

 

[phead128]

How much Intel stock does this group own ?

Even perfect management cannot prevent a shareholder lawsuit in a public company ? Musk was sued despite incredible gains to shareholders.

A claim does not need to be credible to be filed.

Elon Musk lied about Tesla going private, that's stock price manipulation which hurt short sellers. Totally credible lawsuit.

Also, no lawyer is going to waste their time if there weren't some credible evidence (e.g. public statements) pointing to misrepresentation. It takes time and money to fight a lawsuit.

 

[ottonis]

This is most likely a frivoulous lawsuit with zero chances of winning for the plaintiff, as all public reports regarding operability and performance have been greenlighted by the Intel executive board - i.e. by Intel itself. So, the shareholder can file a lawsuit against the company but not a former employee.

 

[thestryker]

He was there for 4 years (3 years, 10 months), just in time for his "5 Nodes in 4 Years" timeline to mature.

Right about his tenure durarion, but utterly wrong about the 5N4Y part.

I think Pat needs to held to "5 Nodes in 4 Years (5N4Y)" timeline he professed

We can agree on that he should absolutely be held to the professed timeline. You just don't actually seem to have a clue what that timeline was. Here let me help you out there since facts clearly aren't your strong suit:
https://www.anandtech.com/show/1682...nm-3nm-20a-18a-packaging-foundry-emib-foveros

Cancelling nodes outright (20A)

There are very real reasons this would be the right move, but until the original 18A timeline plays out nobody will know whether or not Intel was honest about cancelation reason.

gaslighting about true health (18A) is why he has partial responsibility.

You must have some fantastic insight into the 25H2 node which appears to be right on target with the original timeline projections. Either that or you're just regurgitating the speculation and misleading reporting.

 

[JamesJones44]

These lawsuits are common place whenever a stock goes down. They rarely win unless the CEO or CFO clearly covered up something in the lawsuits of these types that I've seen. However, when they do win they often come with big payouts which I'm sure helps with the loss they have to report to their customers.

 

[phead128]

Right about his tenure durarion, but utterly wrong about the 5N4Y part.

We can agree on that he should absolutely. be held to the professed timeline. You just don't actually seem to have a clue what that timeline was. Here let me help you out there since facts clearly aren't your strong suit:
https://www.anandtech.com/show/1682...nm-3nm-20a-18a-packaging-foundry-emib-foveros

There are very real reasons this would be the right move, but until the original 18A timeline plays out nobody will know whether or not Intel was honest about cancelation reason.

You must have some fantastic insight into the 25H2 node which appears to be right on target with the original timeline projections. Either that or you're just regurgitating the speculation and misleading reporting.

Thank you for sharing that article, that was insightful.

I will say that Pat "bet the entire company on 18A" only to be fired 6 mons before 18A does not inspire confidence on the health of 18A (unsubstantiated rumors on low yields not withstanding).

 

[thestryker]

I will say that Pat "bet the entire company on 18A" only to be fired 6 mons before 18A does not inspire confidence on the health of 18A (unsubstantiated rumors on low yields not withstanding).

The board is completely incompetent and has been for at least a decade. Chances that Gelsinger being removed had much of anything to do with him is relatively low (if 18A fails to meet the timeline that's definitely a real reason and on Gelsinger).

Plenty of information before the paywall if you want to understand how this mess happened: https://www.fabricatedknowledge.com/p/the-death-of-intel-when-boards-fail

 

[Kondamin]

Yes Pat is 100% responsible for the abysmal performance of the economy and inflation that made everything a lot more expensive over the past couple of years.

 

[waltc3]

As mentioned earlier in the thread, Intel's problems began years before Gelsinger was brought on board. In fact, the reason Gelsinger was lifted out of retirement is precisely because things had gotten so bad and nobody at Intel had a clue. Had nothing to do with the poor economy/inflation, as AMD went gangbusters during the same period of poor economy and inflation--so did other tech companies.

$207M put back into Intel is a drop in the ocean compared to what Intel needs, and that isn't money right now as the company is flush off the US government's $5B loan, I believe. Intel's problems go back decades to the entire corporate structure built off of being a high-end x86 monopoly chip supplier. Intel was caught flatfooted by the resurrection of AMD into a fiery dynamo and Apple dropping the company for its Macs and other devices. All the stuff Intel counted on--bet the farm on--like the idea that AMD was going out of business and Apple was forever, etc.--fell through. Intel should have boned up on New Testament advice: "Let him who thinks he stands take heed, lest he fall."...😉 But the time for that would have been long before Gelsinger's return. Basically, Gelsinger was way out of his league, almost a fish out of water, but he at least gave it a shot, anyway, but his experience really doesn't fit with today's chip markets. Making Gelsinger a scapegoat is just silly, imo. The fatal faults predate Gelsinger's rehire by many years.

Intel needs competitive products--it really is that simple. Without them, the company has no future. I think spinning off the FABs would definitely help because Intel is too big and cumbersome to manage in today's ultra-competitive markets, and the old monopolistic business model simply will not work anymore.

 

[palladin9479]

That anybody can or should earn 207m over a 3 year period is just gross in of itself. Nobody is worth that. Specially not someone who stood over Intel's run in the last 3 years. Very poor showing from Intel and Pat. But, we can't forget about the board either. The same board that sacked Gelsinger are also complicit in the bad choices of the last few years. I wonder how much they earn?

It's called compensation negotiations. The Board of Directors is responsible for hiring and firing executive officers, and part of the hiring process is negotiating compensation. Boards as the employer make officers, potential-executives make counter offers, negotiations ensue and eventually there is a contract signed.

I know everyone like to pretend to be Vader with the whole "alter the deal", but in real life that's a no-go and just ripe for lawsuits and settlements.

 

[Kondamin]

As mentioned earlier in the thread, Intel's problems began years before Gelsinger was brought on board. In fact, the reason Gelsinger was lifted out of retirement is precisely because things had gotten so bad and nobody at Intel had a clue. Had nothing to do with the poor economy/inflation, as AMD went gangbusters during the same period of poor economy and inflation--so did other tech companies.

AMD's scoring great on the server side where it has a better product than intel
That server side of things has had the luck of seeing an insane boom thanks to the AI bubble that is sucking up all the worlds money.

On the desktop and laptop side of things, where the actual volume of sales are and intel is king due to their capability to produce volume. The market has been in a massive slump since 2021 because everyone and their great grandmother needed to buy a new device at inflated prices to do teleworking or see the grandchildren because of lock downs the year before. Those machines are still good and no one is buying

This wouldn't have been that big of a problem along with the technical issues getting to more advanced nodes if intel hadn't overextended it self building new fabs chasing subsidies and grants.
That's where they messed up, just like AMD messed up ~15 years ago building fabs and buying ATI right when the economy went in to the ******

Intel would have been fine for years to come with lower sales and technical issues if they were able to show some growth to offset the uncertainty that came with the debts they made.

 

[DalaiLamar]

Annihilation!

 

[Roland Of Gilead]

It's called compensation negotiations. The Board of Directors is responsible for hiring and firing executive officers, and part of the hiring process is negotiating compensation. Boards as the employer make officers, potential-executives make counter offers, negotiations ensue and eventually there is a contract signed.

Yeah, I know and get that. The point being, that's a serious amount of dosh, and it's no wonder that someone in the chain wants some back! I think the BOD should have negotiated better!! Don't you agree?

 

[Lewinator56]

As mentioned earlier in the thread, Intel's problems began years before Gelsinger was brought on board. In fact, the reason Gelsinger was lifted out of retirement is precisely because things had gotten so bad and nobody at Intel had a clue. Had nothing to do with the poor economy/inflation, as AMD went gangbusters during the same period of poor economy and inflation--so did other tech companies.

$207M put back into Intel is a drop in the ocean compared to what Intel needs, and that isn't money right now as the company is flush off the US government's $5B loan, I believe. Intel's problems go back decades to the entire corporate structure built off of being a high-end x86 monopoly chip supplier. Intel was caught flatfooted by the resurrection of AMD into a fiery dynamo and Apple dropping the company for its Macs and other devices. All the stuff Intel counted on--bet the farm on--like the idea that AMD was going out of business and Apple was forever, etc.--fell through. Intel should have boned up on New Testament advice: "Let him who thinks he stands take heed, lest he fall."...😉 But the time for that would have been long before Gelsinger's return. Basically, Gelsinger was way out of his league, almost a fish out of water, but he at least gave it a shot, anyway, but his experience really doesn't fit with today's chip markets. Making Gelsinger a scapegoat is just silly, imo. The fatal faults predate Gelsinger's rehire by many years.

Intel needs competitive products--it really is that simple. Without them, the company has no future. I think spinning off the FABs would definitely help because Intel is too big and cumbersome to manage in today's ultra-competitive markets, and the old monopolistic business model simply will not work anymore.

The problem is, since about 2003 intel has never had competitive products. When AMD unveiled athlon64 intel literally had nothing to compete, so rather than do better It decided to use it's immense wealth to play dirty. It chose it's competition strategy was to cheat - to bribe manufacturers to only use their chips and punish them if they used AMDs. This nearly killed AMD and meant that the best chip they managed was bulldozer. Intel therefore didnt need to do anything dramatic, they just had to be better than a company with no money, no market share and no mind share, which is easy when you artificially controlled the market.

Complacent in its artificially created market position, intel was caught completely off guard by zen 1, AMD had pretty much spent 6 years developing it - with no money - and it competed well enough with skylake to be a credible threat. Intel didn't recognise this initially and continued with skylake refreshes, zen 2 is where they were really caught with their pants down. Zen 3 got AMD significant market traction, all while all intel could do was churn out more skylake (now 10th gen) and a dismal 10nm node with chips no faster than original 6th gen skylake.

Intel now has a situation where it NEEDS to produce competitive processors, but it hasnt done this for 20 years because it didn't need to. Arrow lake is a dismal attempt slower than their failure prone 13th and 14th gen chips, and nova lake is apparently not looking good either. Not only is intel losing market share, the 13th and 14th gen debacle has lost it mind share in the commercial market, and intel doesn't have the cash to bribe like it did 20 years ago. Basically they screwed themselves by becoming a monopoly, got caught with their pants down and are now scrambling to work out how to save the sinking ship.