Intel has appointed Lip-Bu Tan as its new CEO, a decision that has sparked a lot of excitement and optimism within the company and among investors. His compensation package, as outlined in a recent filing with the Securities and Exchange Commission (SEC), includes a salary of $1 million. In addition, Tan will receive approximately $66 million in stock options and grants, which will become available over the coming years.
The news of Tan’s appointment has been met with considerable enthusiasm. As a seasoned veteran in the chip industry, his leadership is expected to steer Intel back on the path of success. This week alone, Intel’s shares have surged nearly 20%, largely in response to the announcement of Tan’s new role, which he will commence next week.
In terms of his compensation, Tan’s financial package includes not just his base salary but also the potential for an annual bonus of $2 million. Moreover, he will receive $14.4 million in stock units as part of a long-term equity grant, alongside a $17 million performance grant, both of which will vest over five years. However, these grants will only be fully realized if Intel’s stock performs well over the next three years. Should the company exceed market expectations, Tan could earn even more.
A significant portion of his compensation involves stock options valued at $9.6 million and a new hire option grant worth $25 million. In total, his compensation package, inclusive of salary, bonuses, and stock options, amounts to around $66 million. There is also a provision for accelerated vesting if Intel undergoes a change of control, according to the filing.
Intel praised Tan’s extensive experience and credentials, saying his compensation reflects his status as a distinguished leader in technology. “Lip-Bu’s package is competitive with market standards and heavily focused on long-term shareholder value,” noted Intel in an emailed statement.
In a further sign of his commitment, Tan has agreed to purchase $25 million in Intel shares, a move that qualifies him for his grants and bonuses.
For those keen to learn more about the impact of Tan’s leadership at Intel, an insightful breakdown from Jim Cramer can be found in the attached video.
