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Intel shareholders file case asking ex CEO, CFO to return 3 years of salary
- deleted 2y ago[deleted]
- bhaney 2y agoThat must be an awful lot of salary if it's worth the reputational damage of bringing public attention to this.
- lazide 2y agoEh, or they want their names in the news for ‘doing something’, even if it’s ultimately pointless.
- kopirgan 2y agoLawyers will make 3 years salary
- chollida1 2y ago- No serious hedge funds or other activists involved in this, ie no adults involved, check - Fully audited financials not being questioned, check - CEO and CFO constantly acknowledging the Foundary unit wasn't profitable in quarterly updates, check. The former CEO was brought in to to try and keep Intel a fully integrated business that designed and manufactured chips. He was very clear upfront about his plan to not divest the foundry and instead to try and build it back up. It didn't' work, that's not a crime. He left because his plan didn't work. That's what happens to CEO's who try and fail to implement a business plan. This is just an ambulance chaser lawsuit that doesn't look like it will go anywhere at all. If there was any merit at all then the board would also be involved in going after the former CEO and CFO.
- yieldcrv 2y agoIf these guys cant use the SEC whistleblower bounty program then there isn't a case This is just something petty
- chollida1 2y ago> If these guys cant use the SEC whistleblower program then there isn't a case I think you are confusing a few things. The whistleblower program is for insiders. This lawsuit is being brought by outside shareholders. This has nothing at all to do with whistleblowers as there aren't insiders with insider knowledge. This suit is being brought by outsiders who are unhappy with Intel's performance. There is no insider here trying to expose anything.
- sabbaticaldev 2y ago[dead]
- yieldcrv 2y agoYou don’t have to be an insider, independent researchers have pointed out irregularities, improperly disclosed things and won bounties
- ozim 2y agoYeah good luck hiring next CEO to Intel.
- arthurcolle 2y agoup or down?
- MoreMoore 2y ago> It didn't' work, that's not a crime. He left because his plan didn't work. That's what happens to CEO's who try and fail to implement a business plan. We don't know that it didn't work. We also don't know that selling it off would've been significantly better, so it's weird to pretend that keeping the foundry part of Intel was this big failure. Intel is a cargo ship that doesn't turn on a dime. But the board and investors don't have the patience for long-term strategy that could get Intel out of its downward spiral. The CEO leaving is just another symptom of that, and a sign that Intel is just continuing to dig its own grave, damn the consequences. Just look at all the other projects Intel has tried and failed in the past 20ish years. Zero patience for anything that doesn't bring in billions and isn't immediately successful. We're all just waiting for Intel to give up on the Arc GPUs because of it.
- pantalaimon 2y ago> Zero patience for anything that doesn't bring in billions and isn't immediately successful. That reminds me a lot of Google
- api 2y agoThe explosive growth of so many tech companies has set the bar for everything in some investors minds. If it doesn’t go absolutely vertical it is a failure. Unfortunately this rules out everything that involves anything physical (factories, cars, planes, fabs, etc.) and anything requiring research. In the end it leads to an economy that chases fads and devolves into a pure casino.
- lotsofpulp 2y agoThe top businesses required many years, decades even, of heavy investments into physical infrastructure, including the things you listed plus data centers and global networking over land and under oceans. https://companiesmarketcap.com/ https://companiesmarketcap.com/ The only one that sort of went vertical was Meta, but even they had to build tons of data centers and networking infrastructure.
- 2y ago
- szundi 2y agoSome investors made a wrong bet and trying to save face in front of their clients - spending even more money of those clients on lawsuits
- Almondsetat 2y agoIndividual gains, collectivized losses
- robertlagrant 2y agoNo, everyone got paid who was working there. But if it'd worked, the profits would've been taxed. As it is, the losses are kept private.
- coliveira 2y agoLosses are always public, these investors will use the loss against gains and therefore will pay less taxes, reducing the amount of government revenue.
- lupusreal 2y agoCollectivized or public losses come into play when the government bails out failing companies so that shareholders don't get hosed for a bad investment. Shareholders getting hosed is the opposite of that; private loses.
- robertlagrant 2y agoYes, the government doesn't get to take your money if you made a loss. That's not the same as what you're implying. The investors lost.
- bradleyjg 2y agoNope, this isn’t being driven by any shareholders. The lawyers want a big payday and found a client of convenience. If they win they’ll ask the count for a percentage of the value of the judgment using an innumerate formula for value.
- highcountess 2y agoI don’t think it is accurate to think that the board must be involved for there to be merit. The board represents a totally different set of interests and priorities, many of which may even directly contradict and even clash with those of shareholders, even if they are shareholders themselves. The nepotistic, incestuous, little club of boards and CEOs is almost hostile to shareholder interests once forward momentum stalls, at which point divergent priorities emerge. If the board wants to remain in the board carousel club, they can’t be joining lawsuits against CEOs, when they often themselves are CEOs that frequent the same few exclusive clubs and triple gated communities and celebrate holidays at the same exclusive hotels. There is clearly a stratification there that you are either dismissing or are not aware of. Let me put it this way, the nobility will always hold to each other over any challenges from the merchant class, even if when everyone is making money, there is some mutually beneficial mingling.
- Dalewyn 2y ago>He left because his plan didn't work. He didn't leave, he was fired in the same way that a Drill Sergeant goes "I'm gonna need 10 volunteers..." and then orders 10 unlucky SOBs to gear up.
- bboygravity 2y agoWhy not just invest in a company where the CEO and board take no salary to begin with? They exist.
- highwaylights 2y agoWouldn’t be relevant here, as there are no CEOs anywhere who don’t take compensation. If they’d been taking their compensation as stock grants then they’d want that back instead.
- spacebanana7 2y agoMany founder CEOs take little or no salary or direct compensation for their jobs. Owning a big percentage of the stock is enough motivation to make the company more valuable. Mark Zuckerberg, Steve Jobs and Jack Dorsey have all at times taken $1 annual salaries.
- ponector 2y agoBut Zuckerberg still received more than 24 million in benefits from Meta. Another bluff. It is like saying you have 1$ salary while company is covering all your personal expenses. Actually it will be better, more transparent if he received 24M salary instead of using benefits and bragging about $1.
- missedthecue 2y agoWasn't that all security
- spacebanana7 2y agoIt seems so, in so far as that it’s roughly the same as the number in this 2021 article. https://www.thetimes.com/article/facebook-mark-zuckerberg-security-travelling-at-home-xdjhb787q#:~:text=Mark%20Zuckerberg%20may%20have%20a,security,%20money%20appears%20no%20object https://www.thetimes.com/article/facebook-mark-zuckerberg-se.... Note that is a pretty comfortable form of security, including jets.
- okasaki 2y ago> It didn't' work, that's not a crime. He left because his plan didn't work. That's what happens to CEO's who try and fail to implement a business plan. Is this the famous risk that we keep hearing CEOs take that require such high compensation? Failing and leaving with 10s or 100s of M?
- lotsofpulp 2y agoIt is the risk that you won’t be able to convince one of the handful of people capable of understanding the most technologically advanced manufacturing processes in the world, having the right connections in the industry, to lead a culture change to right a ship. Also, Gelsinger did not get $100M+. https://finance.yahoo.com/news/pat-gelsinger-lost-massive-140-213723546.html https://finance.yahoo.com/news/pat-gelsinger-lost-massive-14...
- PittleyDunkin 2y agoTbf most of this is out of the hands of the CEO, outside the delusions of MBAs
- lotsofpulp 2y agoAnd outside the delusions of random internet commenters, businesses that fail to pay market prices for quality labor, especially at the cutting edge, do not succeed. Whether it be CEO or IC electrical engineer/software developer. That is one of the reasons Intel is where it is, overpaying for MBA talent and underpaying for engineering talent. A person capable of turning around Intel could easily get work at another tech company earn millions with far less risk and far less publicity. Intel needs some of the smartest people in the US working for them, it should have had the reputation of being among the highest paying employers.
- PittleyDunkin 2y agoCEOs aren't paid for they're labor (as if they're even capable of labor!). They're paid to be a liable wad of meat.
- deleted 2y ago[deleted]
- daft_pink 2y agoI’m not convinced that clawing back salary after you fire people is a good and decent public policy. What if everyone who sucked at their job had to payback 3 years salary? Doesn’t really make sense.
- lazide 2y agoFor normal folks? For sure. And the law doesn’t allow it for normal folks. This type of thing is only possible when special rules are made for people with enough power they can hide massive fraud/malfeasance in some cases. This lawsuit seems unlikely to go anywhere though. And frankly, will just increase asking price for CEO salaries.
- gosub100 2y agoI don't think paying people tens-of-millions of dollars in salary is good public policy. he didn't contribute anywhere near that amount of value to the company. If CEOs want to make this kind of money it had better be tied to results only. what kind of logic is "paid if you succeed, paid if you fail" ?
- aetherspawn 2y agoWere they bad at the job, or was AMD and Apple just better? I don’t see how that can be fair.
- nic547 2y agoAMD and Apple have no Foundry
- lnsru 2y agoAMD got rid of the foundries in the past. The other company is GlobalFoundries and looks like to be doing fine. Intel tried to do the same 15 years later, but didn’t succeed. It’s really hard to have both things right - semiconductor manufacturing process and prefect processor design.
- wtcactus 2y agoFirst they shamelessly out the only engineer that could and wanted to be Intel’s CEO in a moment of crisis before his plan could actually be applied. Now, they go after him because - like he told them right at the beginning - short term profits were sacrificed in order to ensure Intel’s long term aims. Good luck finding anyone capable to be the next CEO after these two debacles in less than 1 month.
- RamblingCTO 2y agohow to loose trust of future c level executives: speedrun. Seriously, who would work there after that? If it was gross negligence or something, ok. But not "plan didn't work".
- kayge 2y agoHell I'll do it, for a bargain too. Pay me $10 million (salary+bonus) for 1 year and let's see how it goes ;)
- A_D_E_P_T 2y agoThe complaint itself is here: > https://storage.courtlistener.com/recap/gov.uscourts.cand.441318/gov.uscourts.cand.441318.1.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.cand.44... What's interesting, and what the media generally hasn't reported (probably because the dollar amounts are low,) is that the board of directors is also under fire and every member of the board is named in the complaint. "Demand Upon Defendant ___ Is Excused" refers to the rule that in a shareholder derivative lawsuit the plaintiff is generally required to make a formal demand on the board of directors to remedy the alleged wrongdoing before filing suit. But there is an exception called "demand futility." If the plaintiff can convincingly argue that the board members are too conflicted or otherwise unable to act impartially, the demand requirement is "excused." It doesn't mean that they're not pursuing damages from the board directly, even though the amounts involved are small.
- amarcheschi 2y agoFlashback to 2022 https://www.pcgamer.com/intel-ceo-says-amd-is-in-the-rearview-mirror-and-never-again-will-they-be-in-the-windshield/ https://www.pcgamer.com/intel-ceo-says-amd-is-in-the-rearvie... Now, in those years I obsessively spent a lot of time noticing how Intel earnings started to diverge with the sentiment that the ceo tried to pass to the investors. Regardless of how this goes, I'm just happy I could stay away from Intel and buy amd stocks instead (I eventually sold them)
- a012 2y agoIf Gelsinger’s turnaround plan didn’t work and even got sued for then I think this is the fubar moment for Intel. R.I.P
- oefrha 2y ago> even got sued In a country of frivolous lawsuits, getting sued is almost meaningless. Big companies are sued for all sorts of bullshit all the time. Check back if and when there’s something concrete.
- dathinab 2y agoThrough outside of patent and copyright law very many of the law suites commonly brought up as "frivolous" are actually very reasonable law suites and both the reason they are well known and them being known as "frivolous" is because of company propaganda so that they can push for more forced arbitration.
- smolder 2y agoI think it was FUBAR before Pat came back. That was always going to be a tough ship to right. I'm not sure how much you can credit him with stumbles and successes since, but at least Arc is looking decent with the most recent release. I also think the 285k and ilk aren't such bad chips as a first foray into external fabrication. They're strong all-around performers despite some minor regressions, and they're working in a smaller power budget.
- qwytw 2y ago> but at least Arc is looking decent with the most recent release To be fair that really remains to be seen. It took them how many years to ship a single decent card? Sure it's very competitive with last gen Nvidia and AMD GPUs but it's not clear if that's the case only because Intel is willing to sell them with very low margins or even at a loss.
- phtrivier 2y agoAs a laymen, my prior is that it that the suit has a 0% chance of ending with the top executives giving all the money back. Are there existing cases where it happened ? I would like to evaluate the probability that they will give _some_ money back. Same question : where do I look for existing case ? Does that ever happen ?
- highcountess 2y agoIs not quite zero, even if there is no technical cause, because the suit itself may just be a pressure vehicle and the CEO may feel pressure among his social strata to give some back as a type of penance as condition to remain in good graces and not slam the door shut on any future opportunities. It’s a club, and they want to remain in it.
- lupusreal 2y agoThis is dumb and obviously won't work. I don't expect random shareholders to know better, but what about their lawyers? Why is it okay for their lawyers, who should know better, to waste their clients money and harass these executives with a lawsuit that they know is baseless?
- ChrisMarshallNY 2y agoThat happens all the time. The lawyers make money, which is why they do it. Not just lawyers, either. I suspect a great many of us were ordered to work on projects that we knew were “dead man walking” disasters, because our bosses ordered it.
- lupusreal 2y agoI understand the motive of the lawyers, but why do the law and the licensing bodies allow them to get away with this? If a dentist gets caught drilling healthy teeth he'll be sent to prison, or at least lose his license. Baseless legal threats may not be bodily harm, but on many occasions they've driven people to suicide. Lawyers are utterly lawless.
- hex3 2y ago[dead]
- jl6 2y agoThe only way this could go anywhere is if the employees in question had a very clear performance contract, or if there was significant malfeasance.
- fidotron 2y agoI have been telling everyone for the last decade that Intel proper is a lost cause, and it's partly due to attitudes like this around it which would lead to the CEO etc. taking the heat. * Intel liked to project an aura of their inevitable success, and people inside and outside the company totally believe it. This attracted the sort of hangers on that then added so much corporate gunk that anyone that tried to deal with it would never be allowed to run the ship which they are now sinking. That is on top of the competiton waking up, which was far more predictable than having a single company dominate in the way they had. * https://montrealrampage.com/king-ludd-12-glad-not-to-be-the-intel-ceo/ https://montrealrampage.com/king-ludd-12-glad-not-to-be-the-...
- hinkley 2y agoI sold INTC and bought TSMC about five years ago. Everybody got nice Christmas presents this year because I sold some of my TSMC shares to rebalance my portfolio. It doubled this year and is 65% above its previous plateau.
- jacknews 2y agoLet's see where Intel is in 5 years now the MBAs, finance and legal are running the show again. Pat may not have turned the ship around, but it looked like he was starting to stop the rot at least.
- heisenbit 2y agoYou mean the shareholders who extracted the money over the years which is now missing when we come to the place in Moore‘s Law where the investment requirements are going through the roof?
- PedroBatista 2y agoLooks like Intel is royally screwed. Not much because of their performance as a company ( although it's ugly ), but because of the board and their major shareholders. If they went after previous CEOs from ~2015 to ~2020, I can see some of their points. Not sure if a lawsuit now would be of their best $interest$ but they were also too busy raking in money during that time-frame, no amount of lies would matter. Either way this type of stuff at this critical period in Intel's life might be the swan song for what we know as Intel today.
- atoav 2y agoWhat feels like once in a decade we see the "responsibilties" impact an executives life, responsibility which they frequently cite to justify their high salaries. This should happen far more often. Instead the failures of those people are often carried by states and thus by all of us.
- anoncow 2y agoIt is sad to see what is happening to Intel.
- nubinetwork 2y agoI hope Pat respectfully says no after the board forced him out...
- Havoc 2y agoGood old American fix it with a lawsuit approach.
- bradleyjg 2y agoWe should get rid of derivative lawsuits. There’s plenty of money sloshing around in the securities space. Lawyers can work with activist investors to pay their bills if there’s a real case. But the system of suing on behalf of shareholders that never asked you to represent them needs to go.
- caseyy 2y agoIs this... CEOs being forced into accountability for their actions instead of thousands they lay off? Well, one can dream.
- grecy 2y agoMore recently those consequences had a lot more of a bang…
- deleted 2y ago[deleted]
- caseyy 2y agoIn Japan it's not unheard of for chief executives to take pay cuts when their plans don't work out. If there are bonuses in good times, would it not incentivize executives to perform better if there was also docked pay and executive layoffs in bad times? I know some of you might think no known executive would take that job, and I actually know first hand that's largely true. I also know some that definitely would, but that's besides the point. As an investor, you don't want to hire those c-suites that are allergic to accountability.
- ksec 2y agoBefore I go into the article. I think the front page algorithm is getting silly. >198 points by YetAnotherNick 9 hours ago | 101 comments This is currently at 159 on page 6. I left home and thought I should come back and read it on HN. The points and comments ratio are no way over the top. But it seems to be dropping fast on front page. This is also on Classic currently at 151. It doesn't make any sense.
- pbhjpbhj 2y agoHN has manual moderation too -- I'm pretty sure 'dang' (one of the moderators) has indicated they can alter the trajectory of stories; like making them drop faster.