Key Insights

• Intel's Annual General Meeting to take place on 7th of May
• Total pay for CEO Pat Gelsinger includes US$1.07m salary
• Total compensation is similar to the industry average
• Over the past three years, Intel's EPS fell by 40% and over the past three years, the total loss to shareholders 42%

Shareholders will probably not be too impressed with the underwhelming results at Intel Corporation (NASDAQ:INTC) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Intel

Comparing Intel Corporation's CEO Compensation With The Industry

According to our data, Intel Corporation has a market capitalization of US$130b, and paid its CEO total annual compensation worth US$17m over the year to December 2023. We note that's an increase of 45% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

On comparing similar companies in the American Semiconductor industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$20m. This suggests that Intel remunerates its CEO largely in line with the industry average. Furthermore, Pat Gelsinger directly owns US$18m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. Intel sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Intel Corporation's Growth

Over the last three years, Intel Corporation has shrunk its earnings per share by 40% per year. Its revenue is down 2.3% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Intel Corporation Been A Good Investment?

With a total shareholder return of -42% over three years, Intel Corporation shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Intel that investors should look into moving forward.

Important note: Intel is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.