Intel CEO Pay Rises to $19.1 Million as Security Costs ClimbBy
Company boosted security program after backlash on diversity
Krzanich’s compensation increased 30 percent from 2015
Intel Corp. boosted Chief Executive Officer Brian Krzanich’s compensation package 30 percent to $19.1 million last year, fueled by a bigger stock award and costs for his personal security arrangements.
Intel’s board awarded Krzanich, 56, stock worth $11.7 million, a 20 percent increase from 2015, according to a proxy statement Thursday. The CEO also received $1.25 million in salary, $3.7 million in bonuses, about $2.13 million in security services, plus other smaller items.
The decision to bolster the security program came as Krzanich in April last year said some senior executives had faced backlash for the company’s stance and efforts on diversity, according to a TechCrunch report. In 2015, the CEO pledged Intel would spend $300 million to make the gender and ethnicity of the company’s workforce representative of the U.S. population by 2020. He also vowed to tie executive pay to that goal.
The world’s largest chipmaker, like many other tech companies, has faced criticism for employing few women, blacks and Hispanics. In its diversity report for fiscal 2016, Intel said it achieved pay parity for women and underrepresented minorities and increased its share of female employees to 25.8 percent, a 2.3 percent gain since 2014.
The company spent $1.86 million on personal security for Krzanich and another $275,200 to protect his residence. Executive Vice President Venkata Renduchintala received security services worth $944,800 and Stacy Smith, who oversees manufacturing, operations and sales, got $309,900. The threats were targeted against the CEO and certain other executives, and in some cases their family members, according to the filing, which didn’t provide details on the specific arrangements.
By comparison, Intel spent $39,600 for Krzanich’s security in 2015. The company also enhanced the program that year in response to “specific job-related situations,” a filing shows. His full 2015 compensation was $14.6 million.
The CEO is trying to remake the company by converting its dominance in PC chips into a presence in markets ranging from cars to mobile phones to drones. That push has yet to provide Intel with enough revenue and profit to shake its dependence on its main source of income. Its finances are increasingly reliant on demand for processors running server computers in giant data centers that support computing over the internet.
Krzanich’s annual bonus, which paid out slightly above its $3.5 million target, is tied to absolute and relative financial performance, and operational goals. About 60 percent of his stock award is linked to total shareholder return and vests if Intel beats the median return among a group of tech companies over three years. The remaining shares vest in increments over three years as long as he remains on the job.
His bonus payout can be adjusted based on how Intel achieves goals related to hiring and retaining women and under-represented minorities.
Renduchintala, who joined the company in November 2015, received a $20.4 million pay package.
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