Intel Begins Vetting Execs For CEO Role

Chipmaker Intel is looking for a few good CEO candidates. The company on Sept. 14 announced a management shakeup that kicks off a three-way race to succeed current CEO Paul Otellini.

Though the 58-year-old executive doesn’t face mandatory retirement for at least seven years, Intel begins grooming replacements well in advance. The board in the past also has shifted the retirement age for its chief executive. The company in a statement said the reorganization will give Otellini more time to focus on corporate strategy, moving him away from day-to-day governance of the world’s largest chipmaker.

The move also will streamline the executive reporting structure and begin grooming the next generation of executives for bigger roles. On a structural level, the Santa Clara (Calif.) company will consolidate chip design and marketing operations into a new unit called Intel Architecture Group. The remaining Technology and Manufacturing Group will be headed by former chief financial officer Andy Bryant.

Executive Vice President Sean Maloney will head up business and operations of the core Architecture group. Dadi Perlmutter, another executive vice president, will head up product development. Six executives will report to them.

The shakeup coincides with the surprise departure of Pat Gelsinger, who co-headed the company’s lucrative enterprise computing group. Gelsinger, also a former chief technology officer, had been considered in the running to replace Otellini. But he was named Sept. 14 by EMC Corp. as president and chief operating officer of EMC information infrastructure products.

Company insiders have said Maloney is the leading candidate to replace Otellini. He previously headed sales and marketing, but has held a number of operational roles typical of someone being groomed for the top job.

Bryant has said previously in interviews with BusinessWeek that he wasn’t interested in the CEO’s job, but he, too, has wide operational experience.

Still, there may be an opening for Perlmutter and others. Otellini has been both president and CEO since becoming Intel’s fifth chief executive in 2005. Intel watchers will look to the time when he relinquishes the president’s title to another executive. Such a move often leads to the departure of other potential CEO candidates and sets the person who get the job up for eventual succession.

There’s also a chance that Intel’s board will for the first time hire outside the company to replace Otellini. The chipmaker has been attempting to leverage its pc roots into new markets such as handhelds, devices with relatively cheap chips embedded in them and other consumer electronics. They increasingly are becoming more pc-like, but the going has been slow for Intel. It faces stiff competition from many entrenched players, including Qualcomm, Texas Instruments and Broadcom.

Intel also announced the departure of general counsel Bruce Sewell. And Tom Kilroy, a senior vice president, will take over sales and marketing from Maloney.

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