First let me say that I'd be the last to grumble about our six-figure salaries. And I also think that the owner of a company ought to be able to pay the employers whatever he wants. But that's the problem. I'm an owner of Intel, and my ability to influence pay is very weak. I would not pay my employee $19m and I don't believe I get better performance for $19m than I would for $1m. I'd vote to put the bulk of that in dividends.
There are lots of arguments in favor of high CEO salaries, none of which I buy.
One is that if you DON'T pay $19 million, the CEO will go somewhere else where he/she will be paid such an amount.
But hang on, Otellini is retiring early!!!!
Intel had its fling with an Economist / MBA as CEO and has had a dismal outcome. Its time to "GET SMART", preferably someone with the technical confidence ( backed by track rcoord ) to marshal Intel's fast eroding Fab lead into winning new architectures.
I hear that average pay raise for rank and file employee is 1% this year, which is normally 2-2.5%. So a base salary raise of 9% for an outgoing failed CEO and t-comp of 19M doesn't make sense. Just another evidence that the "suits" have come to roost at Intel and are simply raiding the company.
As I recall Paul Otellini more than doubled Intel's sales while maintaining a very healthy bottom line -- and increasing Intel's market share and process technology lead. Hardly a bad record.
The only criticism I might have is that he realized the ultimate impact of smart phones & tablets on the PC industry a couple of years later than he should have. To his credit, the threat was finally recognized and steps taken to address it. Was it just in time or too little too late? We don't know yet.
Discussion of MBA vs Engineer is ludicrous - by the time any individual becomes CEO of a major multinational corporation they have been organizational managers and business decision makers much longer than they ever were contributing engineers, accountants, etc.
My guess is that Paul Otellini knows more about 22nm process technology and CPU architecture than 99% of the readers of this blog... Does that make him a good CEO or a bad one?
Finally - if the question is could Intel get the same quality CEO for $1M/year, probably not. $10M/year, maybe. Even in the CEO position the free market works. If another company was willing to pay that $1M CEO $5M - why would he stay at Intel?
BTW - If you owned a business, would you hesitate to pay 0.03% of your sales to get the best person possible to run it for you???
"Was Otellini's performance in 2012 worth 190 average engineers?
Don't forget, Otellini is famously not even an engineer (the first Intel CEO to hold that distinction)"
What a narrow tunnel vision
"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."
Maybe Intel should hire NVDA CEO - the guy has an engineering degree but seems to lack people skills calling TSMC (NVDA's manufacturing partner) 20nm process absolutely worthless - yeah and check out NVDA stock price performance....
and he seems to care about Intels TriGates and manufacturing capabilities...
"Nvidia Wants to Make its Chips Inside Intel's Factories"
"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 volunteer to be the CEO of any major corporation for free. Heck, I will pay for the priveledge. The knowledge and connections I would build in the C-suite there would translate into super pay somewhere else in the future.
I think the income of CEOs of major corporations is shameful. I very much doubt that you'd have any trouble finding good ones, if their salaries and other income were cut to 1/10th of what it is now. The problem is that these top execs sit on each others' boards, and incestuously vote up their ludicrous salaries and benefits.
Their main job description is to hustle business, however, a job I would hate. Just like university presidents are hustlers and not educators, the prime concern of these top corporation CEOs is shareholder value. Not cutting edge engineering per se, not products they can be proud of, not even long-term success. Just a good stock value now. If there's any "steering the ship" that they really do, it's only to that end, near term.
I very much doubt they are worth 200 engineers. But on the other hand, at large companies where they make these ludicrous incomes, 200 engineers is a very small fraction of the work force. So the way I see it, the scandalous salaries are more of an annoyance than anything else.
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.
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.