Intel CEO Gelsinger’s reaps near-$180 million windfall from ‘significant magnitude’ of new-hire awards

In Intel’s 2021 proxy statement filed early Wednesday, the semiconductor giant said Gelsinger’s total compensation for the year was $178.6 million, basically for ten-and-a-half months of work.

The compensation included $1.10 million in salary, a $1.75 million sign-on bonus, $5.1 million in non-equity incentive plan compensation, option awards valued at $29.1 million and stock awards valued at $140.4 million.

There was also $401,600 in “All Other Compensation,” which included $257,100 in residential security and $48,700 in company-provided transportation, and $685,000 in the change in pension value and non-qualified deferred compensation earnings.

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“In providing Mr. Gelsinger new-hire equity awards of significant magnitude, the [Compensation] Committee took action to hire the best leader possible for Intel during a critical period, and to provide him with sufficient incentive to join Intel and forfeit approximately $50 million in equity awards from his prior employer,” the Compensation Committee explained to shareholders.

Robert Swan, who Gelsinger took the reins from on Feb. 15, received total compensation of $605,300 in 2021, including $156,300 in salary and $449,000 in all other compensation.

To put Gelsinger’s compensation last year in some perspective, after Swan was named CEO on Jan. 31, 2019, following seven months as interim CEO, he received total 2019 compensation of $66.9 million, including $1.2 million in salary, $3.7 million in non-equity incentive plan compensation and stock awards valued at $61.7 million.

Meanwhile, Intel’s stock didn’t do too well last year, but Gelsinger may be starting to show his value to shareholders this year.

Intel’s stock gained 3.4% in 2021, while the PHLX Semiconductor Index
SOX,
-2.27%
powered up 41.2%, rival Advanced Micro Devices Inc.
AMD,
-8.29%
soared 56.9% and the Dow Jones Industrial Average
DJIA,
-1.56%
climbed 18.7%.

Year to date, however, Intel shares have slipped 0.1%, while the SOX has dropped 11.1%, AMD’s stock has shed 17.2% and the Dow has slipped 3.1%.

VMware’s stock dropped 17.4% last year, but has gained 0.3% so far this year.

For 2022, Intel’s Compensation Committee targets total compensation for Gelsinger at about $26.3 million, which would put him in the 50th percentile of Intel’s peer group for CEO compensation.