- Sunday, 8 November 2009
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Headlines without verbs are like pigs without truffles - Mike Magee
Intel rescues drowning employees
AS THE CHIP INDUSTRY SINKS FASTER THAN THE TITANIC, Intel has decided to send a lifeboat to employees, announcing a revamp of its staff compensation plan including a freeze on top executive salaries and an exchange of 'underwater' stock options.
In a federal filing of its proxy statement with the SEC today, Chipzilla said it would exchange all but senior executives' 'underwater' stock options for options with a lower exercise price. In other words, give employees a bit of a boost despite the fact the stock market – and the firm itself – is not looking so hot right now.
Around 87 per cent of Intel employees hold stock options and Chipzilla reckons over 99 per cent of its currently outstanding employee options are under water.
But instead of letting employees drown their sorrows, Intel reckons by re-jigging its options, it will be able to cling on to 'talented employees' who might otherwise leave. But then, with hiring freezes giving silicon valley a nasty case of frostbite, we don't see exactly where Intel employees would go!
Some 488 million stock options would be eligible for the proposed exchange, apparently. Of course, the move is not likely to sit well with shareholders and... surprise, surprise, they are the very people who need to approve it.
Not all Intel employees will be worried about how it all pans out, however, especially not those in Intel's top five: the excessively high-earning, fat-skimming executives at the top of Chipzilla's abundant food chain.
Because as well as Intel's plan to bail out desperate, starving, one-SUV-per-family employees, the SEC filing also detailed the salaries of the firm's top earners. Prepare to feel nauseated:
Intel CEO, Paul Otellini comes in top with a whopping $12,722,600 in base salary, stock awards, stock options, incentive plan and 'other compensation'. Next in line, chief sales and marketing officer – and INQ heartthrob – Sean Maloney makes a tidy $5,529,100, whilst Chipzilla's chief administrative officer, Andy Bryant, scrapes in just behind him at $5,502,900.
Big Dadi Perlmutter also joins the high rollers with his $4,724,300 pay cheque, while poor old Intel CFO, Stacy Smith, makes only a paltry $2,542,200.
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Mr Smith is not hitting anything.....
As noted, few employees have somewhere else to go now, but with the options adjustment incentives to stay will rise along with opportunities to leave. It can be pretty annoying to hear executives crowing about the improved situation when all you've got is a pile of crap options.
It's a bit tacky to complain about the salaries of executives at a company that: A. is making money B. isn't getting a government handout. C. is trying to take care of it's employees. and finally D. Isn't connected at all to the Banking and Investment industry, which is where the trend of complaining about bonuses and salaries started and is appropriate.
On top of it all, did I happen to mention they were making money? How many other semiconductor companies are doing that? Yes, Q4's net take was *only* just shy of 300 Million USD, but compared to how everyone else is/was doing, you can hardly justify the statements in the article.
Charlie's favorite CEO, Jen-Hsun Huang made ~$25 Million and that company is nowhere near as healthy as Intel.
Intel is going to be around after the financial crisis. In the meanwhile they're taking care of their people by making sure they're getting a paycheck and putting food on the table. Doing something, anything, to try and prop up people's retirement funds is pretty darn noble if you ask me. Anyone who criticizes them for that either has an agenda against them or is a fool.
no Moto, I think you are missing the point
lets say, you are a talented engineer who makes monies for your company(Intel),
is it right that some lucky figurehead dude makes 150times as much as the companies higher paid engineers?
not even an engineer
not to mention what he makes from google
Intel will make money no matter who sits in that seat, v lucky seat to be sitting in.
Ecen when AMD where hammering Intel in the barton days, when all Intel had was netburst, they still made money
his expense account is more that any standard engineers salary
some cowboy accountant type takin 12million for his wages(+ expenses) just isnt right
try workin there and all you have to show for it is a load of intel stock options @ $50-$80
wake up and smell the roses fanboi
intel are as bad as the rest, they just still happen to have about 100billion in their savings account
I'm sure he did something to deserve that place. If you can do that too, you can also start making more money. Stop complaining.
You forgot to mention that the options revamp will use "value for value" swap. What that means is, if an employees stock options are estimated to be at some value X, Intel will give him stocks worth that value. Now believe it or not, that actually works out better for the shareholders. First, the value of the stock options was already expensed--so this value-for-value swap does not appear anywhere on the Intel's balance sheet. Second, the number of stocks that Intel will give employees in this deal, will definitely be less than the original number of stock options. This reduces the outstanding "S" in EPS, bumping the companies EPS. It is a win-win for both the employees and the shareholders. Only the most twisted in their mind would disapprove of this deal.
Solution Is So simple. EveryOne At Intel, Come To WhiteHouse, Lay Egg & Roll It. Heres info site: http://www.whitehouse.gov/eastereggroll/ No Tickets Till Thursday, Yet They'll GO Fast, OnLine. Ahso, FYI, if Andrew had Ears Cut off would look bit like ole' Man. STeWie drashek
Amusing how I'm supposed to be a fanboi... fanboi of what? Intel's CEO? I assume you're trying to link my praise of their performance with some imaginary hatred of AMD. Sorry Charley, but I buy from both companies and hold stock in both. No matter who wins, I win, end of story.
I'm a fan of well ran companies and that happens to be a pretty long list. Your argument is merely another rehash of White collar v.s. Blue collar. To assume executives don't work hard is stupid. Yes they get a lot of perks but they also had to work pretty darn hard to get to the place they are. You may as well complain that doctors make too much because they only work 6 hours per day and have a large staff to do most of the work. Doing so completely ignores the years of school and years establishing themselves. Good executives are no different. If you remove your own rose tinted glasses, Otellini has been working for Intel since 1974 and was promoted from the bottom to CEO over a period of 30 years... I think he's earned his spot and his paycheck.
If you remove the leadership and throw in any tom, dick, or harry and the place will fall apart. Look at General Electric, they're being tossed under the bus by the media and investors because people felt they did exactly what you suggested Intel could do and get away with it.... Wrong, wrong wrong. Without good leadership, no company can do well. It's just as important as having good employees. Good employees are wasted if the leadership is incompetent.