'Performance Shock' Intel CEO Salary Cut by 25%

[Asia Economy Reporter Yujin Cho] Intel, which turned to a deficit due to the direct impact of the semiconductor downturn, has announced a self-help plan to cut the salaries of CEO Pat Gelsinger and other executives.

On the 1st (local time), Intel announced that CEO Gelsinger will forgo 25% of his base salary this year. Compensation for senior executives and middle managers will also be cut by 10% and 5%, respectively, according to rank.

In a statement on the same day, Intel explained, "As part of cost-saving measures considering the macroeconomic situation, we have decided to adjust the employee compensation program this year. This adjustment is designed to impact executives more than employees and to support the investments and workforce needed to accelerate innovation and achieve long-term strategies."

Intel posted earnings shock-level results in the fourth quarter of last year. On the 26th of last month, through the Q4 earnings announcement, it reported a net loss per share of $0.16, turning to a deficit compared to a net profit of $0.10 per share in the same period last year. The adjusted net loss per share was $0.10, significantly below the $1.15 in the same period last year and also below Wall Street's estimate of $0.20.

The estimated revenue for the first quarter of this year was presented at $10.5 billion to $11.5 billion, significantly below Wall Street's estimate of $13.9 billion, forecasting that the sluggish performance trend will continue this year.

Intel aims to reduce costs by $3 billion this year in sales and operating expenses and to cut up to $10 billion in costs by the end of 2025.

Foreign media analyzed that amid worsening earnings, Intel urgently needs cost reductions as it continues an unprecedented move to accelerate new factory expansions based on the benefits of the semiconductor support law worth tens of billions of dollars.

Bloomberg reported that Intel, which experienced a sharp decline in sales and profits last year, has taken executive salary cuts as part of its plan for a performance turnaround (return to profitability).

The move to cut executive salaries is not limited to Intel. Apple CEO Tim Cook has decided to reduce his salary by 40% this year, receiving only $49 million. David Solomon, CEO of Goldman Sachs, a leading Wall Street investment bank, received $25 million last year, a 30% cut compared to the previous year’s salary.