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Intel's CEO Just Sold a Lot of Stock
- ericb 9y agoEven if he thinks the company will do well, selling at the PE multiple the market is giving now probably makes sense.
- mikestew 9y agoKeeping the bare minimum number of shares, is he? And that's a bad thing? Well, tell me the number of pieces of flair, err, I mean shares he should hold to be acceptable. Kidding aside, the article did read as hunting for something to make out of this. I mean, if he holds the minimum number of shares that company requires of a CEO, that's $11 million. Just how many of his eggs does he need to keep in that one basket?
- r00fus 9y agoThe CEO is allowed to do as he does, but actions have consequences. He knows what it means to cut down to bare minimum, and this could be considered a signal that he feels he could get more than the forecasted % elsewhere, and that he doesn't feel holding on to the stock is worth the negative backlash that is sure to happen with such a move.
- thephyber 9y ago> He knows what it means to cut down to bare minimum, and this could be considered a signal that he feels he could get more than the forecasted % elsewhere, and that he doesn't feel holding on to the stock is worth the negative backlash that is sure to happen with such a move. Possibly. But it's possible that he did it on the assumption that US tech stocks are already overvalued and anticipates a correction soon. Yes, he likely isn't "all in" on Intel stock right now, but does that necessarily mean that it's specifically Intel that he thinks has problems?
- fjsolwmv 9y agoHis action is telling all shareholders to sell Intel stock because it's overvalued. Maybe not Intel specific, but it's Intel inclusive.
- user5994461 9y agoOr he's buying a new yacht.
- deleted 9y ago[deleted]
- jasomill 9y agoWhy not simply investments that he happens to believe are better values than Intel stock? Or is he expected to believe that Intel shares are in fact so undervalued that they represent the best investment he could possibly make? Or to voluntarily maintain investments in what he believes is a comparatively suboptimal vehicle merely to "take one for the team"? In other words, why would one expect, let alone demand, a CEO to make what he believes are poor financial decisions in his personal life? As for being "invested in the company", once you reach the level of Fortune 50 CEO, the concept is basically nonsense: practically speaking, no matter how poorly you invest or perform, barring criminal prosecution, you'll still end up financially better off than nearly everyone else in the world, including many, if not all, of your peers.
- jdavis703 9y agoIt depends on how much faith you put in the CEO. If you want to see him with a lot of skin in the game, then you'll probably want to sell your shares now. If you're basing ownership off some other values (projected growth, P/E ratio, whatever), then maybe it's fine to hold on to your shares.
- michaelt 9y agoJust how many of his eggs does he need to keep in that one basket? Many executives receive very high total compensation, but structure it in a certain way as a sort of fig leaf to pretend it's in the shareholder's interests. For example, instead of being paid $12,000,000 a CEO might pay themselves $2,000,000 in cash and award themselves $10,000,000 in stock. The fig leaf in that case is that it aligns his incentives with those of shareholders. There's totally not a principal-agent problem here, honest! Selling all $10,000,000 of shares kinda reveals that fig leaf for what it is: giving himself the shares was never about aligning his incentives with shareholders - he just wanted the cash. If shareholders' interests were represented competently and in good faith, you'd expect a very different incentive structure.
- ericd 9y ago>If shareholders' interests were represented competently and in good faith, you'd expect a very different incentive structure. I'm curious, what is the very different compensation structure you'd propose?
- michaelt 9y agoIf you're curious then you'd enjoy reading "Pay without Performance: The Unfulfilled Promise of Executive Compensation" https://www.amazon.com/Pay-Without-Performance-Unfulfilled-Compensation/dp/0674016653/ https://www.amazon.com/Pay-Without-Performance-Unfulfilled-C...
- ericd 9y agoLooks interesting, thanks! Could you summarize briefly what you were referring to in the parent comment, though? I'm not sure when I'll get a chance to read the book.
- mikestew 9y agoSelling all $10,000,000 of shares kinda reveals that fig leaf for what it is: giving himself the shares was never about aligning his incentives with shareholders - he just wanted the cash. That right there is the money quote for me that invalids my "pieces of flair" metaphor. You're right, the very best thing one might say about flipping the shares for cash is it's a bit crass; at best.
- mikeokner 9y agoA $60 price in 2021 is about 7% growth per year which is about average for the market as a whole over the past 50ish years, but significantly lower than current market growth and especially current tech sector growth. Still, it looks pretty terrible as CEO to be dumping every last share you're allowed to.
- proto-n 9y agoCould be related to [1]? [1] https://news.ycombinator.com/item?id=16052451 https://news.ycombinator.com/item?id=16052451
- endymi0n 9y agoObviously not. What could an unfixable CPU design bug that will impact every Intel processor (and cost up to 30% performance through the neccessary fixes) possibly do to the companies‘ stock price? /s
- Moral_ 9y agoThis "bug" is so blown out of proportion it's sickening. It breaks KASLR, a thing no one uses.
- cjbprime 9y agoYou're likely incorrect. It now looks like a speculative execution exploit/leak. We don't know what the bug is exactly.
- daenney 9y agoExcept everyone that runs kernel 4.12 and onwards, where it was enabled by default and many distributions have had KASLR enabled earlier. Also, it doesn't just affect KASLR. KASLR isn't even the concern here. Based on the info that is available/has been pieced together, it appears to be a bug, at the hardware desing level, in Intel CPUs speculative execution capabilities.
- exportgoldman2 9y agoWrong. Wrong. Wrong. Sigh. This bug allows a user level process or even a website to read any memory on the pc, including memory of another vm on the same box. Bitcoin wallets, passwords, keys, all up for grabs by anon. Can't be fixed by intel so all os providers have to implement fixes in os which slow down pc by approx 30%. So you gaming pc or aws instances just cost more
- oh_sigh 9y agoDoesn't this make sense? Sell the shares now. If he does well over the next 3 years, he will be rewarded with more stock grants. If he does poorly, he will probably be out of a job but at least he has the money from this sale (and much more, I'm sure)
- dbcurtis 9y agoIs it simply part of a regular sales plan? When I was at Intel, any execs that were classified as insiders had such narrow windows when sales were legal, and were under such scrutiny, that they often set up a stock sales calendar to allow sane divestiture of their option-based compensation. There is no meaning to be read into a fixed schedule.
- craftyguy 9y agoThe interesting part is that he's only keeping the bare number of shares that he is required to keep. This suggests that he'd likely be 0% invested in the company (i.e. holding 0 shares) if he had the chance to, meanwhile he continues to try to persuade employees to retain Intel stock to "stay invested in the company."
- w0m 9y agoStaying invested in the company and locking your financial future to it are very different things - diversification is ~almost always a good/sane thing to do. Personally, I tend to sell all of my employers stock when I get it and diversify, though I keep 1 share to 'stay invested'.
- vorotato 9y agoI think people waste a lot of money betting on the significance of CEO sales.
- cm2187 9y agoReal estate company CEOs selling their own stock was a canary for the 2007 crisis. Insider selling their own stock is often a tell-tale sign of the top of the market.
- arcticfox 9y agoExactly, this is a logical move to rebalance his net worth outside of Intel. Otherwise he's got a whole lot of eggs (including his career) in one basket.
- prklmn 9y agoSo he’s the CEO who knows the most intimate details about his company, including what the next few years hold. If as CEO he’s not confident enough to have a whole lot of eggs in the company that HE is running, why would anyone in their right mind want to have a single egg in this company?
- jmeyer2k 9y agoI think it's very difficult to understand everything happening at every level in such a large company, even for the CEO. Many random things could happen that would cause the stock to drop not directly affected by the CEO.
- GameOfTrolls 9y agotldr; Massive Intel CPU security bug incoming. The (((fix))) may have a 40% performance hit, across all architectures.
- deleted 9y ago[deleted]
- rajacombinator 9y agoThese guys can dump their shares whenever they want, secretly, via private contracts. Pointless trying to read anything into public data.
- fjsolwmv 9y agoThat's illegal and expensive id discovered
- m0thr4 9y agoNothing to do with this then? https://forums.theregister.co.uk/forum/1/2018/01/02/intel_cpu_design_flaw/ https://forums.theregister.co.uk/forum/1/2018/01/02/intel_cp... I imagine Apple's lawyers will be sharpening their knives, considering how deeply they're in with Intel. This is going to cost Intel dearly... and will surely affect the share price, regardless of the actual threat it poses.
- 39u8hifler 9y agoHe knew and he sold shares ahead of everyone else. Why is this legal?
- yakitori 9y agoSmart. INTC is at a 15+ year high in a huge bull market. Just makes sense to shave some off.
- theclaw 9y agoThe article is a week old, and so predates the public disclosure of the bugs. He knew what was coming.
- jboles 9y agoReally suspicious timing in light of today's announcement.
- angelmerkel 9y agohe s money grabbing douche bag east european shitkicker made good and grabbing the main chance
- angelmerkel 9y agoHe s a money grabbing grade a douche bag eastern european emigre' shitkicker with an eye for the main chance.
- onerioi 9y agoIf you lose anything because of the bug, find a good lawyer. I'm sure there are a few that would love to go after this CEO's billions. He should pay because he was paid a lot to run Intel right, and didn't.