Ousted Intel CEO Pat Gelsinger set to receive $10 million in severance
Ousted Intel CEO Pat Gelsinger set to receive $10 million in severance
Leadership transition at the semiconductor giant includes a significant payout for the departing CEO, amid ongoing challenges and strategic shifts.
Pat Gelsinger, Intel’s recently departed CEO, is set to receive a severance package potentially exceeding $10 million, according to a filing with the U.S. Securities and Exchange Commission (SEC). Gelsinger, who resigned abruptly on December 1 after three tumultuous years at the helm, also stepped down from Intel’s board and its subsidiary, Mobileye.
Under the terms of the “Retirement and Separation Agreement,” Gelsinger will receive 18 months of his base salary of $1.25 million, amounting to $1.875 million, and a payout equal to 1.5 times his target bonus. With the target bonus set at 275% of his salary, this adds $5.16 million to the package. Both payments will be disbursed over an 18-month period.
Additionally, Gelsinger is eligible for a pro-rata share of his 2024 annual bonus, equivalent to 11/12ths of the full amount. This component, estimated at $3.15 million, is contingent on Intel’s financial performance and will be paid alongside bonuses to other executives. While his total severance starts at $7 million, it could rise to $10.18 million if all conditions are met.
Gelsinger’s exit comes as Intel faces mounting challenges, including declining revenues, intensified competition from Nvidia and TSMC, and a troubled transition to advanced manufacturing processes. During his tenure, Gelsinger set ambitious goals, such as building two $20 billion chip factories in Arizona, but many of these initiatives have yet to bear fruit.
He also initiated significant cutbacks, including postponing factory projects in Poland, Germany, and Malaysia, and reducing its real estate footprint by two-thirds. These actions followed a $10 billion cost-cutting plan announced earlier this year, including 15,000 layoffs and curtailed employee benefits.
Intel has appointed CFO David Zinsner and senior executive Michelle Johnston Holthaus as interim co-CEOs while it searches for Gelsinger’s permanent successor. Despite recent struggles, the company has secured over $11 billion in federal funding under the CHIPS Act to bolster its U.S.-based semiconductor production.
