Intel Chief’s Pay Is Nearly Halved
Intel Corp. cut Chief Executive Craig Barrett’s compensation by almost half last year to $6.74 million as the company’s shares fell 27%.
Barrett, 65, received $2.62 million in salary, bonus and other compensation, according to a Securities and Exchange Commission filing released Tuesday. He received $4.1 million in stock options, down from $10.5 million a year earlier, based on a Bloomberg News valuation using the Black-Scholes pricing formula. His total package in 2003 was $12.7 million.
Barrett’s drop in compensation reflects a decline in Intel shares last year, when the company canceled or delayed five products and made too many chips after it misjudged demand. In May, Barrett, who has reached Intel’s mandatory retirement age for CEOs, will hand the top job to President Paul Otellini.
Otellini, 54, has started reorganizing some company businesses to help counter slowing revenue growth.
He was paid a total of $5.44 million last year, according to the filing, including options valued at $3.52 million. That was down from a 2003 pay package of $8.32 million. He’ll receive salary and bonus of $1.4 million as well as options to buy 900,000 shares after he assumes the CEO job, Intel said Feb. 8.
Barrett will continue to receive $610,000 in salary and his targeted bonus is $700,000, according to the filing. That is less than half his 2004 bonus of $1.84 million.
Intel lowered Barrett’s potential bonus to reflect his new responsibilities as chairman and the adjustment isn’t related to the performance of the company, said Chuck Mulloy, an Intel spokesman.
Intel’s sales rose 13% in 2004 to $34.2 billion and net income climbed 33% to $8.11 billion. Revenue growth is expected to slow to 10% this year and profit is forecast to rise 8%, according to analysts surveyed by Thomson First Call.
The stock fell 15 cents to $23.15 in Nasdaq trading. It has dropped 16% in the last 12 months.