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.
