Intel Freezes Salaries
Chip-maker also announces plans to fix underwater stock options.
Thu, March 26, 2009
The Industry Standard — Intel CEO Paul Otellini collected US$12.7 million in salary last year. Hope he's OK with that figure, because neither Otellini nor anyone else at Intel will get a raise this year, the company announced in an SEC filing on Monday.
But there's good news for employees: The 87 percent of Intel staffers who have stock options priced above the market rate for INTL shares—currently $15.57—will be offered a swap that gives them fewer options, but drops the price of those options to the market rate. That way, employees have a better chance of eventually making some money by exercising the options, but are still incented to raise the market price for Intel shares before they can cash out.
In the filing, Intel claimed a 24 percent decline in net income between 2007 and 2008.
The San Jose Mercury News reports that Starbucks, eBay, Google and AMD have already performed similar options exchanges. The Merc also quoted an Intel spokesman who said the company has reduced its contributions to employee retirement savings accounts and stock purchase plans.
