The total compensation packages of top executives at Intel fell sharply in 2013 as a result of changes in the way the chip maker pays senior employees.
No where was this more apparent than at the very top of Intel’s executive ranks.
Brian Krzanich, the company’s recently appointed CEO, was paid a base salary of US$887,500 in 2013. A year earlier Paul Otellini, the outgoing CEO, received $1.2 million.
Krzanich’s compensation package also included a $1.8 million bonus and $6.3 million in Intel stock for a total of $9.1 million. Last year, he received $15.7 million from Intel, the majority of which came in stock.
The total compensation for President Renee James dropped from $15.2 million to $7.7 million.
Both Krzanich and James are “driving a cultural shift” at the company and the adjusted compensation levels are part of that, Intel said in a regulatory filing.
“Among the actions being taken is creating an environment of greater accountability through changes to Intel’s compensation guidelines,” it said.
The new structure means that executive base salaries are fixed with the remainder of executive compensation based on performance.
As a result, there’s “a strong link between an individual’s total compensation and the company and business unit results,” said Intel.
Base salary makes up roughly 10 percent of the total compensation of Intel’s top 350 executives and senior engineers under the formula. The remainder is in the form of an annual bonus, worth about 24 percent of the total, and Intel stock worth about 65 percent of the total, but those amounts will change based on Intel’s business performance.
Executive Vice President Dadi Perlmutter received a total of $6.7 million against $15.7 million a year earlier and compensation for Chief Financial Officer Stacy Smith fell from $15.1 million to $6.2 million, according to the Intel filing. Otellini received a total of $4.3 million in 2013, down from $18.3 million in 2012 when he was CEO.
The biggest contributor to the drops in total compensation was sharply curtailed equity grants.