Intel changes its executives' pay rules
Intel, the world's largest chipmaker, said it will require more executives to own stock and tie bonuses to operating goals, in moves aimed at connecting pay more closely with the company's financial performance.
Starting this year, 350 senior leaders will have to own specified amounts of shares, the company said in a letter to shareholders. That's up from the 50 executives covered under existing guidelines.
Intel said it was changing its pay structure following input from investors, seeking to align its compensation with the interests of shareholders.
The stock rose 26pc last year, compared with a 30pc gain in the Standard & Poor's 500 Index. Sales slipped for a second straight year. The rules are being instituted under chief executive Brian Krzanich, who was promoted to the company's top job in May.
"The company is clearly in transition and they need to adjust the compensation structure to motivate employees to do well," said Patrick Wang, an analyst at Evercore Partners in New York.
Investors in public companies are increasingly voting against proposals for executive pay, said Aaron Boyd, director of governance research at Equilar, which tracks executive compensation. Intel may spur a trend, he said.