Gelsinger, other Intel execs take pay cut following dismal financial results

Intel's top executive along with other leaders of the company behind Ohio's biggest economic development project are taking a pay cut after it reported dismal financial results for the final three months of 2022 and gave a weak outlook for 2023.

Intel's hourly workers won't see an actual pay reduction, but the company match to their 401(k) retirement plan will be slashed in half for now.

"As we continue to navigate macro-economic headwinds and work to reduce costs across the company, we’ve made several adjustments to our 2023 employee compensation and rewards programs," Intel said in a statement. "These changes are designed to impact our executive population more significantly and will help support the investments and overall workforce needed to accelerate our transformation and achieve our long-term strategy. We are grateful to our employees for their commitment to Intel and patience during this time as we know these changes are not easy."

The pay cuts are the latest sign of financial struggles for a company spending $20 billion to build two factories, called fabs, in New Albany that will employ 3,000 workers. Intel has said the site could one day have eight factories, representing a potential total investment of $100 billion.

CEO Pat Gelsinger's pay will be cut 25%. Other senior managers and members of the executive team will take reductions of 10% to 15%, and the pay for midlevel managers will be cut 5%.

Gelsinger's base pay in 2022 was $1.25 million, meaning his salary will be reduced by $312,500, based on regulatory filings.

Gelsinger also receives a bonus, stock awards and other forms of compensation.

The company hasn't filed its documents yet that show Gelsinger's full compensation for 2022, but the 2021 documents show his compensation was expected to be $26.3 million.

The cut in the 401(k) match from 5% to 2.5% applies to all workers. The company spent $489 million in 2022 on matching contributions to qualified retirement plans, according to Intel's regulatory filings.

As the same time that Intel is aggressively expanding − building out operations in Ohio, Arizona, New Mexico, Germany and elsewhere − it has been cutting costs and staff amid a slowing economy and weakening demand for semiconductors.

On Jan. 26, the company posted financial results that badly missed Wall Street estimates for the final three months of 2022 and gave a dour outlook for this year, results that sent the company's shares tumbling. Intel shares have been cut in half over the past two years.

"I want to remind everyone that, we are on a multi-year journey. We remain focused on the things that are within our control as we navigate short-term headwinds, while executing to our long-term strategy," Gelsinger told analysts on a conference call when those results were released. "While I remain sober that, we have a long way to achieve our financial expectations, I am pleased with the transformation progress that we are making."

mawilliams@dispatch.com

@BizMarkWilliams

This article originally appeared on The Columbus Dispatch: Intel executives get salary cuts after company post weak financials