Intel CEO Gets $6.18M in 2006
Tuesday March 27, 12:51 pm ET
By Jordan Robertson, AP Technology Writer
Intel CEO Otellini Gets $6.18M in 2006 Compensation
SAN FRANCISCO (AP) -- Intel Corp. CEO Paul Otellini received compensation the company valued at $6.18 million in 2006, a year in which the company undertook a massive restructuring to reverse sinking profits but also fired back against its archrival with a strong new product lineup.
Otellini got a 15 percent boost in his salary this year to $700,000, according to a filing Tuesday with the Securities and Exchange Commission. He also received $1.77 million in non-equity incentive plan compensation, and $236,700 in other compensation, including more than $15,000 the company contributed to his retirement plan.
Otellini's award also included $2.64 million in options, and $837,000 in restricted stock. He pocketed more than $2.3 million by exercising options on 192,000 shares of stock.
The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The may vary from totals that companies report.
Otellini and other executives at the Santa Clara-based chipmaker were penalized for the company's financial performance -- net income was down 41 percent from the prior year -- and for not meeting certain operational goals.
Intel said it cut bonuses for its top officers by about 40 percent as the company fell short of its targets for introducing new products and in boosting worldwide growth. It exceeded its goals in the areas of manufacturing and improving the technology used to build chips.
Intel also scaled back a companywide program rewarding all employees with extra days of pay based on the company's profit margins and customer satisfaction. Employees were each awarded 15.1 extra days of pay in 2006, down from down from 17.8 days the year before.
Intel, the world's largest computer chip maker, said in September that it was eliminating 10,500 jobs -- about 10 percent of its global work force -- as it faces intense pressure to unload money-losing divisions and halt the encroachment of Advanced Micro Devices Inc. on its lucrative core microprocessor business.
Intel's stock is trading at relatively the same price as last year, but investors have expressed concerns that price cuts and heavy spending on the transition to a new manufacturing technology will continue to eat into gross margins.
And despite losing about 4 percent of the overall processor market to AMD in 2006, Intel seems to have stunted some of that growth -- particularly in the high-margin server chip market -- with a line of more powerful and energy-efficient chips than previous generations.
However, Otellini's counterpart, AMD CEO Hector Ruiz, was far more richly rewarded for his company's performance in 2006, with compensation valued at nearly triple Otellini's amount.
Ruiz collected compensation the company valued at $16.1 million last year, about $7.2 million of which were restricted stock awards that are contingent on the Sunnyvale-based company's performance through 2008.[
AMD's stock has taken a beating over the past year despite the gains at Intel's expense, plunging more than 60 percent and wiping out about $10 billion in shareholder wealth on fears about AMD's spending and ability to maintain those gains.