Intel's Grove hits out at CEO salaries

AN ARTICLE IN today's Washington Post has Intel's chairman, Andy Grove, hitting out at excessive salaries for CEOs.

Grove collected $1.5 million in salary and bonuses last year and also got stock options worth around $6 million.

The paper claims Grove said that firms should look at excessive compensation, after writing a letter to the Conference Board, which wants large corporations to regard share options as an expense.

Many multinationals don't count share options as expenses, and it's easy to see why Intel's chairman dissents from the Conference Board view, provided you know how the firm rewards its own employees.

If staff do well, they are rewarded with share options but they don't get them all in a great big bundle but in a way which encourages the employees it wants to keep to stay longer. They're likely to lose future rolling options if they decide to cut and run.

For this and other reasons, many Intel employees have far longer stints at the chip giant than is typical of other firms in the computer technology sector.

Really long-standing Intel employees are known within the firm as "Excels", because they have a little Microsoft Excel spreadsheet macro which takes the share price and works out how much their share options have earned today.

Unfortunately, Intel's share price has declined in recent months, standing at $14.67 yesterday from its 52-week high of $36.78. This is a ridiculous drop in its fortunes, and must be due to Wall Street lemming behaviour, which I'll cover in a separate story later today.

Here's the Washington Post article. µ