Intel's new CEO lands $66M pay deal, with stock performance conditions
Intel's CEO, Lip-Bu Tan, has a $66M package linked to stock performance.
Intel has announced that its incoming CEO, Lip-Bu Tan, is set to receive a comprehensive pay package totaling $66 million. His base salary will be $1 million, and he has the potential to earn up to a $2 million annual bonus. The substantial portion of his compensation, however, is tied to long-term equity awards and stock options. This strategic measure is designed to ensure Tan’s goals align with long-term shareholder value creation. These equity awards encompass a $14.4 million long-term equity grant and a $17 million performance grant in Intel shares, vesting over five years.
One of the key conditions of Tan’s compensation is the stipulation that Intel's stock price must not decline over the next three years for the performance shares to be awarded. Additionally, if Intel excels beyond market performance, additional shares may be granted. To further align his interests with those of the company, Tan has secured stock options worth $9.6 million and received a new-hire option grant valued at $25 million. An important aspect of his agreement includes Tan’s commitment to buying $25 million in Intel shares within his first month of employment. Intel’s board emphasized that his compensation was modeled on industry standards, acknowledging his vast experience.
The underlying theme ties Tan’s remunerative benefits closely to performance outcomes, a growing trend in compensation norms for executives in the tech sphere. This structure places significant emphasis on equitable growth and places a premium on exceptional stock performance, elements increasingly common among tech industry leaders. An SEC filing described provisions for accelerated vesting should there occur any changes in the company’s control, ensuring Tan's compensation secures its value regardless of shifts in ownership structure.
Lip-Bu Tan voiced Intel’s commitment to revitalizing its leadership position as a dominant foundry, aiming to enhance competitive positioning against major industry players like Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung. With Intel’s stock price enjoying a nearly 20% rise in 2025, Tan steps in during a period of positive momentum, tasked with steering further advancements and maintaining this financial positivity. His extensive background includes leading Cadence Design Systems from 2009 to 2021, a solid foundation Intel seeks to leverage.
As part of Intel's Board of Directors since 2023 and having served on Cadence's board since 2004, Tan's industry presence is extensive and well-respected, bolstered by his tenure as a board member and CEO at Cadence. Ample industry and strategic oversight associated with equity grants are noted to have been carefully structured to leverage Tan's expertise, driving forward Intel’s corporate agenda amid a competitive market environment.
Sources: TechSpot, Financial Filing, Company Statement