This just in. Paul Otellini, the CEO of the world's biggest chip maker, pulled down a cool $19 million in total compensation in 2012. The total compensation was up about 9 percent compared with 2011, according to a report by the Bloomberg news service.
Otellini's base salary also rose by about 9 percent to $1.2 million. The bulk of the $19 million was made up by non-salary compensation including Otellini's bonus, stock options, stock grants, pension and other benefits.
I can hear some engineers grumbling even now. The average base salary among North American EEs totals just over $100,000, according to the most recent EE Times Salary and Opinion Survey. And it's a pretty good bet that not one of them earned as much in additional compensation as Otellini. Was Otellini's performance in 2012 worth 190 average engineers?
The pay gap between the people at the top of the org chart and the rank and file has been a hot-button issue for years on the pages of EE Times and elsewhere. We took a little deeper dive into this a few years back.
Of course, there are those who will argue that a good CEO is infinitely more valuable than a rank and file engineer. Or even 190 of them. No matter where you stand on this issue, you have to acknowledge there is some truth to that. You can have hundreds of the best engineers in the world, but if no one is steering the ship the company is not going to succeed.
Don't forget, Otellini is famously not even an engineer (the first Intel CEO to hold that distinction). He's an MBA. He's paid by Intel's shareholders to protect and grow their investment. Investors don't necessarily care about Intel's industry leading process technology, tri-gates, 22-nm, or Sandy Bridge. They care more about the value of their investment. Just for the sake of discussion, Intel's stock price closed 2011 at $24.25 and was down to $20.62 by the end of 2012.
I think we can all agree that the CEO ought to be paid more than the average employee at a firm. Otherwise, who'd want the job? But things do appear to be tilted pretty far out of whack.
I don't have a problem with CEOs being paid well. I do have a problem with them getting millions of $ when they get fired. Since the stock price dropped over the year, his stock options weren't worth as much, but when you don't pay for the stock to begin with, you still walk away with a lot of money.
No, you are absolutely dead wrong. Your logic is fundamentally fraud. If money becomes the key mechanism to keep a talent people, a business establishment can easily beat the competition by letting them to spend all the money to feed the "fat captain" to steer a ship with rank & file bearing no royalty and their own mindset that are not aligned to those of the fat captain!
Remember, while a ship needs someone to steer, it cannot move without the hundreds and thousands of rank & file to physically move the paddles in the same direction. The most important assets of a company is not the CEO, but the rank & file who are dedicated and equally committed to paddle in the same direction! Look at USA of today, there is no longer the amount of fundamental research which gave us the internet of today. Instead, a lot of money go to the CEOs and VPs, the R&D Dept of most companies in USA are left with crumbs. HP is a perfect example. HP Way had been turned into the Board Way or the CEO Way. Pretty much every rank & file is disposable. Worst still, many didn't get any pay rise for the past many years! If thinkings like yours do not got thrown out sooner, USA will risk being at the bottom of the global ranking by the end of this millennium.
No complains. We spend significant time on IMBO and R&R. who cares if we are loosing market share. We have a good process to get there. More over we had many many meetings to comeup with stratergies to get into cellphone markets...stay tuneed for another spin beyond FINFET.
It was a BIG mistake to have hired a non Engineer as the CEO of Intel, he could neither anticipate market shifts nor re-direct Intel to take advantage of. No doubt he was able to maintain Intel x86 sales during the Great Recession using various business tactics ( and pretty much drove AMD out of the game ) but failed to switch Intel to the faster growing Mobile business. Not having the Tech cred. himself he kept following the path set by his Engineer predecessors at Intel, i,e. keep pushing on new Transistor technologies and ever bigger Fabs that was no longer relevant but did nothing on developing new chip designs that can win against ARM.
The next CEO at Intel should be able to quickly marshal Intel's process technology lead ( TSMC closing in ) into new architectures that can outdo ARM yet still run x86 software.
All of the comments are well taken but non have the ultimate impact of RobDinsmore, a person who has a taste for who really pays Otelini's salary. In the case of elite atheletes, the differentiation between great and commonplace are easily measured. Unfortunately, a CEO can be wildly successful in spite of himself by having a great workforce beneath him. A workforce that he had absolutely nothing to do with putting in place. Perhaps it's time for an engineer's union ;-)
I disagree with the "Who'd want the job?" concept. If Otelini only made 2x what the normal engineer made, many people would still want that role. It's not the salary so much as the prestige and power. Having 80k employees work under you would make anyone feel important.
I worked under him for a year earning approximately 1/2 percent of what he makes. I was on call 24/7 every 3rd week and it was the most mindnumbingly stressful and horrible experience every 3 weeks. This was working in PTD on their leading edge process, the tech that actually makes Intel, well Intel. If Mr. Otelini actually gave a crap about his engineers, he could have cut his pay and hire more people so his top engineers would not have to have no sleep every 3rd week babysitting his R&D modules.
The money has to come from somewhere and Mr Otelini costs 190 engineers, the rest of his executive staff costs another several hundred combined, yet his actual engineers sacrifice their work life balance because there is "no money" to hire more people.
dont worry all, this ll be fair in the end.
He can 't eat all 19million anyway.
He can eat maybe 500$ per day, use $100 gas per day, 100$ electricity, water...
He will leave 18million to the rest of world when he die....
Of course Tim Cook, CEO at Apple, makes a whole lot more money so it's all relative I guess. In some sense 19 million for the CEO of a comapny with over 50 billion in sales is not out of line. At least Intel is actually making something and directly and indirectly employs well over 100,000 people. My beef is with the exorbitant salaries of hedge fund managers and CEOs in the financial services industry.
I will give kudos to Otellini for one Intel direction.
He Kept Intel Fabs mainly in the USA. While most greedy CEO’s have driven the semiconductor industry overseas. Anyone ever count the Fabs in the USA 25 years ago and the FABs in the USA now ?
Intel is one of the few that continues to invest in the USA.
Outside of that, the direction provided by Otellini is average at best and his salary should have reflected it.
..People in power take care of themselves… that is the bottom line.. That is the way it has been and the way it will be.