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Shareholders Reject Intel’s Executive Pay Package

Executive pay refers to both the financial compensation and non-financial benefits received by top executives in a company. According to Forbes, CEO pay packages were up by nearly 19% compared to the previous year. During the last year, while many CEOs took a pay cut, a majority of executive compensation packages rose by 11%.

The Wall Street Journal reported that executive pay in the US reached record highs as the pandemic waned. In 2021, CEOs made 254 times more than the average worker, up from nearly 7% in comparison to the year before. Median executive compensation reached $20 million, as a result of stock options and bonuses, in 2021. Nine CEOs had pay packages worth $50 million or more. For the top 25% of CEOs, nearly 78% of their compensation was linked to equity.

Meanwhile, executive pay packages decreased by a meager 1.6% between 2019 and 2020, due to pay cuts brought on by the pandemic.

Intel’s board members converge during an event in October 2021.

The widening pay gap is a testament to the fact that benefits of corporate profits are enjoyed by those at the top. Benefits rarely, if ever, trickle down to those at the bottom. In such cases, pay transparency helps close pay gaps and reduce bias.

Pay transparency is extremely beneficial for companies as it motivates employees to work harder and they often see more candidates from within the company competing for the top spots. It is also a great solution to bridge the gender wage gap. Encouraging salary discussions and keeping it transparent forces people to question their inherent beliefs and indirectly holds them accountable.

A survey conducted by a software firm in 2021 found that over 51% of employees surveyed admitted that they will switch companies for better pay transparency.

Intel Shareholders and Executive Pay

In a regulatory filing, it was revealed that Intel shareholders rejected the recent Intel executive compensation packages. The filing shows that “stockholders did not approve, on an advisory basis, Intel’s executive compensation of its listed officers.”

The California-based tech company’s package for top executives included a nearly $178.6 million payout for Chief Executive Officer Pat Gelsinger. Around 1.78 billion votes were cast against the Intel executive compensation plan, although the votes are non-binding. Nearly 921.2 million votes were cast in favor of the executive compensation.

Intel CEO Pat Gelsinger had a pay package of almost $178 million last year.

In a statement, the chipmaker mentioned that it takes investor feedback very seriously. The company revealed, “we have already taken specific steps to address investor questions regarding compensation, including making our overall compensation approach easier to understand, clarifying our annual performance bonus goals, clearly linking pay to performance, and increasing our disclosures and transparency.”

As per a regulatory filing, the CEO pay package at Intel was roughly 1,700 times more than that of the average employee. The vote shows that investors are carefully following Gelsinger’s promise to turn Intel around.

Gelsinger took charge as Intel’s CEO in February 2021. He was granted an executive pay package of nearly $178 million later that year. The Intel executive pay package includes a salary, bonuses, stock awards, and option awards.  In the debate over Intel executive pay, the technology company stated that it believed “having 73% of the CEO’s new-hire equity awards contingent on achieving ambitious stock price growth was in the best interest of Intel and its stockholders.”

Intel executives cheer at Intel Vision 2022, where the company announced how it has transformed different sectors with its services.

People’s rejection of the Intel compensation package shows rising awareness about corporate profits. In early May, shareholders vetoed the proposed $230 million pay package for General Motors CEO Larry Culp. As per the results, nearly 57.7 % of shareholders rejected the executive pay packages. This result is in line with last year’s trend, where a record number of shareholders rejected CEO pay packages, which they felt were unfair amidst layoffs and low revenues.

Christy Gren

Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

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