Former Intel CEO Pat Gelsinger to Receive Over $10 Million in Severance

Intel and Pat Gelsinger have finalized a retirement and separation agreement, entitling the former CEO to a severance package valued at just over $10 million, contingent on the company’s performance.

Compensation Package Details

The compensation package consists of multiple components. One portion is equivalent to 18 months of Gelsinger’s base salary of $1.25 million per year, totaling $1.875 million. Another part is 1.5 times his current target bonus, which represents 275% of his base salary, amounting to $5.16 million. These payments will be made over an 18-month period through payroll.

Additionally, Gelsinger will receive a prorated payment equal to 11/12 of his 2024 annual bonus, approximately $3.15 million. Some of this amount depends on the company’s performance and other conditions. In total, the former CEO’s exit package ranges from $7 million to $10 million.

By comparison, WeWork founder Adam Neumann received an exit package worth over $400 million, while former Yahoo CEO Marissa Mayer walked away with $54.9 million in 2016.

Intel’s Challenging 2024 and Leadership Transition

The year 2024 has been tough for Intel, with the company’s value dropping by about 30% in early August after reporting a net loss of $1.6 billion, a significant decline from a $1.5 billion profit the previous year. As a result, Intel laid off 15,000 employees and cut $60 billion in costs. In August, the departure of executive Lip-Bu Tan led to a 6% drop in Intel’s stock. Additionally, shareholders sued the company after losing $30 billion, accusing Intel of hiding its problems, which they claim led to investor losses.

Following Gelsinger’s departure, Intel appointed David Zinsner, Executive Vice President and CFO, and Michelle Johnston Holthaus, CEO of the Intel Products division, as interim leaders. Zinsner has over 25 years of experience in the semiconductor and technology industries, while Holthaus has been with Intel for nearly three decades, holding various leadership roles.

Gelsinger chose to retire after 40 years at Intel, opting out of termination. In his farewell statement, he expressed pride in Intel’s achievements and gratitude towards his colleagues: “Leading Intel has been the honor of my lifetime. I am forever grateful for the many colleagues around the world who I have worked with as part of the Intel family.”

Intel’s board of directors has formed a committee to identify a permanent replacement for Gelsinger. Following his departure, Intel shares initially rose but later stabilized, reflecting ongoing uncertainty as the company transitions to a die-cast chip manufacturing model.