Intel Corp.’s new chief executive Lip-Bu Tan will have a vested interest in whether his efforts to turn around the chip company pan out.
Tan intends to purchase about $25 million in stock from the company within 30 days of assuming the CEO position, Intel disclosed in a Friday filing. He takes over the role on Tuesday.
The structure gives Tan immediate financial alignment with the moves he makes at Intel. Tan’s intention to buy a significant amount of stock could also provide a confident signal to investors.
See also: Analysts love Intel’s CEO choice — but not enough to recommend buying the stock
Tan has the opportunity for a substantial financial windfall as CEO—on top of the $1 million annual salary and the possibility of a $2 million performance-based bonus that Intel announced on Friday.
Tan will receive multiple forms of compensation from Intel totaling approximately $66 million. This includes $14.4 million in performance stock units, $9.6 million in stock options, a substantial hiring incentive worth $25 million in options, as well as an additional $17 million awarded through performance-based stock units.
In an email to staff following his appointment, Tan highlighted the necessity of "reshaping Intel for tomorrow" by transforming the firm into a "top-tier semiconductor manufacturer." He also emphasized striving to "exceed customer satisfaction as never before."
"We also bear the duty of delivering returns to our shareholders — a priority that I am just as committed to and anticipate will result from our refocused attention on customers," he stated.
Tan has a substantial challenge waiting for him At Intel, the firm has lagged in technological advancements and is currently undertaking an expensive effort to revitalize its production capabilities.
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"There are certainly areas where enhancements can be implemented, including the excessive workforce and bureaucratic environment, however Intel requires much more significant transformations," noted Richard Windsor, an independent analyst from Radio Free Mobile.
He observed that Intel’s "primary operations face unprecedented challenges, which significantly limits their financial capacity for substantial investments as expected." Additionally, although investors might desire a separation of the foundry division, Windsor mentioned that achieving this quickly could prove challenging due to the specialized nature of the company’s manufacturing facilities, which utilize exclusive equipment not widely used throughout the rest of the sector.
After the CEO announced the news, Intel's stock surged over 14% during the trading session, yet it has dropped by 44% in the last twelve months.
