14 DAY TRIAL // Chip manufacturer Intel awarded its CEO a huge cash bonus during last year, that almost doubled its compensations. The report is based on his filling with the Securities and Exchange Commission.
According to the compensation filling, Paul Otellini got $12.1, which accounts for some $6.2 million added to its regular $5.9 million received during 2006. This is a significant increase that upped his revenue to 104 percent.
The cash bonus seems to be the company's "Thank you" card to the man that had a significant impact over the company's progress. Intel's shares got a 33.6 percent appreciation on the stock exchange market , with a 7.6 percent increase in Nasdaq.
According to Intel, the cash award is meant to align Otellini's compensation with other competitors' compensation packages. "Both elements were increased in light of peer data indicating that his cash compensation was significantly below the committee's compensation goals," Intel said.
Despite Otellini's huge paycheck update, Intel's board of directors still believe that the company's CEO is still underpaid, as compared to the peer group (the persons that have the same position in other companies).
Intel's comparison is not limited to AMD only, as chip manufacturer, but to the executives of other important companies, such as Coca-Cola, Exxon Mobil, Chevron, Safeway, and even the Bank of America.
"For 2007, the peer group consisted of technology companies generally considered comparable to Intel as well as non-technology companies within the Fortune 100. For the peer group used in 2007, the committee's intent was to choose companies that had one or more attributes similar to Intel's, including semiconductor or computer design, manufacturing and integration, and large enterprises with global operations," Intel reported in the filing.
Intel has done a good job during the last year, as the company managed to stick to the roadmap and delivered the promised products almost on time, except for the 45-nanometer quad-cores that encounter slight delays.
In contrast, AMD's CEO Hector Ruiz got a similar raise that boosted its salary to "only" $12,848,435. Not only that Ruiz's income is still larger than Otellini's, but the two companies are not even close in terms of performance during the last year.