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| UPDATED: 2006-05-18 |
 Intel Execs Have A Rough Day 
By: David Utter 2006-05-18 Unhappy shareholders directed barbs at Intel's leadership during its annual stockholders' meeting, and called for more action to boost a lackluster stock performance.  Intel (INTC) presented the usual orders of business at its yearly stockholder event. When they began to talk about introducing Restricted Stock Units into the company-wide equity plans this year, some shareholders must have thought Intel meant the restricted performance of its stock instead.
During the presentation, one shareholder invoked the performance of Hewlett-Packard under new CEO Mark Hurd and suggested Intel needed to do some bloodletting in the executive offices as well. Executive compensation is tied to performance, and Intel did finish fiscal 2005 with net income of over $8.6 billion. That led the compensation committee to lavish CEO Paul Otellini with a bonus of $2.68 million and stock-based compensation worth $5.9 million. Intel director Reed Hundt noted during his presentation that the compensation plans are "consistent with long-run interests of Intel stockholders." Otellini showed the year-over-year changes at Intel. Net revenue has moved upward by 13.5 percent for a couple of years, and both gross margins and operating profits have increased. He also acknowledged that reductions in spending and capital expenditures were "insufficient" and hinted at layoffs in discussing how Intel would become a leaner and more efficient company. New products like the Core 2 Duo and Woodcrest chips promise better performance for the desktop & mobile and the server markets. Intel has felt the impact of competition from rival AMD, and it's difficult for any Intel observer to miss some broader implications regarding its relationship with Dell. Dell has lost some market share to the resurgent HP, and HP uses AMD chips in a lot of the products in its personal systems line. That line gained some of Dell's share, and Dell has been Intel's biggest customer for years. Although new products from Intel may offer better performance, Dell's equally angry shareholders may push the company into considering more AMD business, if AMD can offer better profit margins. If that were to happen, Intel's internal review of its operations will have to accelerate, along with the actions that review indicates they need to take. --- Tag: Intel Add to | DiggThis | Yahoo! My Web | Furl Bookmark IFN - 
About the Author: David Utter is a staff writer for InternetFinancialNews and WebProNews covering technology and business. |
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