Intel shareholders voted last week against the company’s compensation for its top executives, according to an regulatory filing published on Monday.
The vote is advisory, and won’t immediately affect the compensation of Intel’s executives, but sends a signal that some Intel investors are closely watching the performance of CEO Pat Gelsinger and the progress of his turnaround plan for the chip giant. Overall, shareholders representing about 34% of the shares voted for the package. Of those voting, shareholders representing about 920 million shares voted to approve, and those representing 1.77 billion voted against it.
The vote is the latest example of shareholders voting against executive compensation packages, which can include hundreds of millions of dollars in company stock.
For example, AT&T shareholders voted against an executive compensation measure in April. In 2021, 16 companies had executive pay packages rejected by shareholders, according to As You Sow, an activist investor group.
Gelsinger took over as CEO of Intel in Feb. 2021, and received a compensation package worth $178.59 million later that year, according to a financial filing. The compensation included over $1 million in salary, a $1.75 million bonus, over $140 million in stock awards, and nearly $30 million in option awards.
Since Gelsinger took over, he has embarked on a mission to turn Intel around, as the once-dominant chipmaker has fallen behind in manufacturing and has started to lose market share to rival AMD. Gelsinger has said that Intel will spend heavily to build new chip factories, and that Intel will be both a contract manufacturer for other chip designers in addition to developing its own chips.
Gelsinger may not get some of the equity he was awarded — the actual payouts depend on the performance of Intel’s stock over five years. As of the end of January, Intel said, the payout of these awards is tracking at 0% because Intel stock is trading lower than when Gelsinger took over.
“The Compensation Committee believed that 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 said in its proxy filing.
Last year’s compensation measure also failed, gaining only 38% support.
“The Committee took the outcome of this vote seriously and was highly focused on gathering and responding to our stockholders’ feedback regarding Intel’s executive compensation programs,” Intel said in its proxy, referring to last year’s vote.
Intel’s other named officers for 2021 also included Sandra Rivera, the general manager of the company’s data center business, three former executives who left during 2021, and one executive who plans to leave this month, according to Intel’s filing.