What’s Intel trying to prove here?
Over the weekend, we were reading the proxy that Intel (INTC) filed late Friday and were mildly surprised when we got to this statement in the CD&A:
The committee supports the goal of management to maintain an egalitarian culture in its facilities and operations. Intel’s executive officers are not entitled to operate under different standards than other employees. Intel does not have programs for providing personal benefit perquisites to executive officers, such as permanent lodging or defraying the cost of personal entertainment or family travel. The company provides air and other travel for Intel’s executive officers for business purposes only. Intel’s company-operated aircraft hold approximately 40 passengers and are used in regularly scheduled routes between Intel’s major U.S. facility locations, and Intel’s use of non-commercial aircraft on a time-share or rental basis is limited to appropriate business-only travel.
While the use of the word egalitarian wasn’t new — Intel first started using that word in its filings back in 2003 — the level of detail, the so-called philosophy behind the statement, is much more detailed than in the past. In last year’s proxy statement, for example, Intel noted that its “egalitarian culture, inspired by Intel’s founders, discourages the committee from offering employment agreements, severance payment arrangements, change in control agreements, or perquisites to our executive officers.”
At a time when it’s not uncommon to see even executives at troubled companies rack up lots of money on personal use of the corporate jet — see here for just one recent disclosure at Sprint (S), whose CFO racked up over $600K flying between his home and Sprint’s HQ in Kansas City — Intel seems to be raising the ante on all of those other top executives at companies large and small who cling to dubious security studies that require them (and in many cases their spouses and other family members) to use the corporate jet for all personal and business travel.
After all, are we really supposed to believe that Intel executives face fewer security threats or time constraints — another common reason for the company paying for the personal use — than executives at other publicly traded companies? That certainly seems a bit hard to swallow!
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Posted in Tags: new disclosures, proxy, technology |
 6 Comments » |
April 6th, 2009 at 10:19 am
Intel’s jets are more like a private airline for company employees. I’ve had friends that were mere interns that had access to their regular scheduled routes between SJC and PDX.
Interesting that they’re doing a little bit more cover-your-ass action this time around. Either way, when it comes to tech companies in the bay area that have ridiculous jet policies, look no further than Google. Not only is their access to Moffett field a little shady, they have a plane that has such huge capacity, it’s regularly referred to as a “party plane”.
April 6th, 2009 at 12:07 pm
Intel is planning to allow shareholders an advisory vote on compensation next year and is likely setting up the disclosure such that shareholders feel comfortable supporting their executive compensation practices/policies.
April 6th, 2009 at 1:29 pm
This is Intel culture – in place since they were established back in the 1970s. I’m reading Tedlow’s bio of Andy Grove. The two founders – Noyce and Moore – and employe #3/4 Andy Grove (some question about the number) fostered that spirit of egalitarianism from the start. No special parking spots, ate in the same cafeteria and carried their own trays, had cubicles, no plush corner offices, worked their b*tts off, etc.
As George Bernard Shaw said in a completely different contest, “We must learn to be self-sacrificing, so we can sacrifice others without blushing.” (paraphrasing)
April 6th, 2009 at 7:25 pm
I had occasion to visit Gordon Moore in his office in 1972. Our firm, Vidar Corp. wanted to use Intel’s new shift register memory chips in a new system we were developing.
Moore’s office was a cubicle with a standard government issue type steel desk and conference table. Nothing fancy.
Also, Bill Hewlett and Dave Packard operated HP the same way. No private offices.
April 6th, 2009 at 9:25 pm
No mention here of shareholder diluting stock options plans for employees. This company is run for the employees, not the shareholders.
April 7th, 2009 at 3:11 pm
Hey, I’d work for Intel if they were in my neck of the woods. Then again, I’m just a file clerk. I’m guessing everybody there does their own filing too. :/