What’s Intel trying to prove here?

April 6, 2009

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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