Intel’s new CEO gets a $1 million salary plus $68 million in bonuses

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That looks like a lot of money.

Lip-Bu Tan, chief executive of Intel
(Image credit: Intel)

Intel appointed a new CEO this week after ousting Pat Gelsinger in late 2024, finally giving it a permanent chief executive. Lip-Bu Tan will take the helm of the tech giant, and he’ll be paid handsomely for his efforts.

According to a CNBC report, Mr. Tan will receive $1 million as part of his annual base salary and a yearly bonus of $2,000,000. In comparison, Gelsinger had an annual base salary of $1.25 million with cash bonuses that span up to 275%.

Tan will also receive a long-term equity grant of $14.4 million and a performance grant of $17 million (both in Intel shares) to be paid over five years if Intel’s stock doesn’t drop over the next three years. Tan also gets stock options worth $9.6 million and a new hire option grant of $25 million.

The bonuses total about $68 million in value at face value. While this may seem significant, the $2 million annual cash bonus and $31.4 million in stock grants over five years are tied to his performance as the company leader.

Tan is not also given stock options and a new hire option grant—instead, he has the option to purchase Intel stock at a predetermined price, with the total value of these stocks at the time of writing at $34.6 million. Finally, he needed to purchase and hold $25 million in Intel shares to be eligible for all these rewards.

Can Lip-Bu Tan turn Intel around?

These figures are massive, especially for a struggling company that laid off nearly 15% of its workers less than a year ago. However, Tan's bonuses are all tied to his performance. If the company’s stock price dips further in three years, he will forfeit the stock grants, and his holdings in Intel stocks will also devalue, which could potentially net him a total loss.

Lip-Bu Tan is a former Intel board member who allegedly left after clashing with Gelsinger’s strategy for turning around the company. Despite that, there were rumors that Tan was being considered for the position soon after Pat Gelsinger stepped down. When the company finally announced the appointment, Intel's stock rallied by 15%, indicating the market’s confidence in the decision.

Many Intel employees are apprehensive about it, though, as Tan’s alleged reason for leaving the board was that Gelsinger’s cuts weren’t enough to keep the company afloat. He has already warned about “tough decisions” during his introductory video call with the rest of the company but hasn’t made any concrete announcements yet. We will know more in the coming weeks as Lip-Bu Tan takes control of the chipmaker, but we hope his leadership will finally turn around the company’s fortunes.

Jowi Morales
Jowi Morales
Contributing Writer

Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.

28 Comments Comment from the forums
  • Heiro78
    Time will tell how great a decision it was to have removed Papa Pat. Also this article states
    "Tan also gets stock options worth $9.6 million and a new hire option grant of $25 million."

    and later contradicts itself with

    "Tan is not also given stock options and a new hire option grant—"

    I'm guessing it's just a typo mistake to have included "not" in the second quoted section.
    Reply
  • lmcnabney
    His bonuses are earned by just keeping Intel's share price from dropping. Not to recover or grow, just to keep the company solvent. Talk about low standards.
    Reply
  • ekio
    That’s a lot of money to just not suck.

    They should be paid bonus based on the company health. Negative, zero bonus, positive, then bonus (if the previous year was not negative).
    Reply
  • phead128
    His base salary and bonus is significantly less than Pat Gelsinger's, and his stock options are tied to company performance milestones, so no freebies.
    Reply
  • timsSOFTWARE
    Heiro78 said:
    Time will tell how great a decision it was to have removed Papa Pat. Also this article states
    "Tan also gets stock options worth $9.6 million and a new hire option grant of $25 million."

    and later contradicts itself with

    "Tan is not also given stock options and a new hire option grant—"

    I'm guessing it's just a typo mistake to have included "not" in the second quoted section.
    I think it was a mistake. Investors were too impatient, and will pay the price in the long-term. Just like it took 15ish years to lose process leadership, it would have taken at least that long - staying the course - to win it back. Lip-Bu Tan's philosophy seems to be that of the aggressive cost-cutter, seeking profitability through layoffs and cutting benefits.

    And that might be the way to go if you are in a commodity business where any profit to be made is at the margins, but I just don't see US-based Intel competing successfully as the "cheap" fab option. Intel's only shot at long-term success was to return to being on top, where they could command higher prices/profit. And that means a different set of marching orders than cost-cutting/austerity - I think they needed a CEO who would work hard to scrounge up the funds and preach a hopeful message, while going all-in on R&D, and a focus on returning to being elite.
    Reply
  • spongiemaster
    lmcnabney said:
    His bonuses are earned by just keeping Intel's share price from dropping. Not to recover or grow, just to keep the company solvent. Talk about low standards.
    The stock options are worth nothing unless the price goes up. If he wants to make money from his stock options, he absolutely does have to make the company better. Just keeping the company solvent, won't achieve that.
    Reply
  • hotaru251
    if companies want to cut cost...CEO are the PRIME example of where AI can cut spending for a company...
    Reply
  • tom2tec
    This is exactly what classism looks like. The rich get richer while prices become unaffordable for the rest of us.
    Reply
  • watzupken
    phead128 said:
    His base salary and bonus is significantly less than Pat Gelsinger's, and his stock options are tied to company performance milestones, so no freebies.
    I feel this may sound like a great idea, but in general, it is ineffective. A CEO's compensation can be tied to the performance of the company by giving him/her stock or options, but at the end of the day, as long as they keep it alive or prevent a massive erosion of value, they will eventually still get paid. And to "keep it alive" or prevent massive loss in value, you just have to cut cost and do little to change the actions required to grow the company. And this is what we normally observe where CEOs are hired and fired, but still get paid a handsome amount of money for their "golden handshake/ parachute". And after that, another will take over and do the same. It sounds like "passing a bomb" and see in whose hands will it blow up eventually.

    In my opinion, I feel at least Pat tried to do something to grow the company, though I am not in agreement with the plan to focus on the foundry business because it is clearly a burden to them since they started falling behind during the transition from 14nm.
    Reply
  • bit_user
    The article said:
    Tan will also receive a long-term equity grant of $14.4 million and a performance grant of $17 million (both in Intel shares) to be paid over five years if Intel’s stock doesn’t drop over the next three years. Tan also gets stock options worth $9.6 million and a new hire option grant of $25 million.
    The stock portion of his compensation is where the real money is - especially given how low Intel's share price is, right now. However much he (or external factors) can boost their share price, these amounts will increase by roughly the same ratio.
    Reply