Introduction
The tech world was shocked when CEO Pat Gelsinger quit Intel without warning in December 2024. There are still some questions about why he was fired, but the big severance deal he got—reportedly $25 million—has caused a lot of debate.
The company is having a terrible time financially, with a huge $7 billion running loss in its foundry services business and a stock price that is falling all the time.
Members of the Intel community are very angry and want Gelsinger to return a big chunk of his pay. Let’s dig deeper into this and study the key reasons fueling investor anger.
Broken promises and bad plans are a sure way to make things go wrong.
The big Intel Foundry Services (IFS) scheme was a key part of CEO Pat Gelsinger plan for Intel. This effort aimed to place Intel as a big competitor in the chip manufacturing space, challenging industry giants like TSMC.
But IFS did not keep the vows it made. In 2023, the division hemorrhaged a massive $7 billion, a far cry from the rosy estimates given to investors.
Shareholders claim that Gelsinger and his team intentionally mislead them about IFS’s true performance, weakening trust and causing significant financial losses.
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Less Money Coming In and Layoffs
Pat Gelsinger’s tenure at Intel saw declining income and reduced product profitability. These trends cast doubt on his strategic decisions.
The impact on Intel’s financial health was severe. The company faced widespread layoffs.Intel also suspended its dividend payments.
This decision hit shareholders directly.
A Leader’s Abrupt Exit
Adding fuel to the fire of investor dissatisfaction was Gelsinger’s sudden departure in December 2024. This unexpected exit left many wondering his dedication to Intel and the future of his ambitious plans.
While the official reasons for his exit remain secret, the timing – amidst the company’s financial problems – has fueled speculation and further eroded trust.
A Severance Package or a Slap in the Face?
The crux of the controversy lies in Gelsinger’s hefty retirement package, estimated at a staggering $25 million. This payout includes a regular salary for 18 months, a hefty achievement bonus, and a significant number of Intel shares.
For owners who watched the company’s financial fall under Gelsinger’s leadership, this severance package feels like a slap in the face. It raises questions about responsibility and the misalignment of executive pay with company success.
Shareholders Demand Repayment
Intel owners are not taking this situation lying down. A lawsuit has been brought asking that Gelsinger and former CFO David Zinsner return a combined $207 million in pay.
This case argues that the leaders misled investors and failed to deliver on their promises, eventually harming the company’s financial health.
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Conclusion
The Gelsinger story serves as a cautionary tale for business leadership. It shows the value of transparency, responsibility, and aligning executive compensation with business success.
For Intel, the road ahead is unclear. The company must regain the trust of investors, create a clear and achievable strategy plan, and manage the ever-evolving semiconductor environment. Only time will tell if Intel can weather this storm and emerge stronger.
