The value of Intel Corp. Chief Executive Paul Otellini’s compensation package rose slightly to $12.4 million in 2008, a year in which the chip maker’s profit was whacked by a global slowdown in personal computer sales.
However, a large part of his 2008 compensation came from options that currently have little value because of a decline in Intel’s stock price.
Santa Clara-based Intel said in a regulatory filing Monday that it raised Otellini’s base salary, from $770,000 to $1 million in 2008 because his overall cash compensation was “significantly” below what executives from other companies in Intel’s peer group took home. The company has frozen corporate officers’ base salaries in 2009 because of economic uncertainty and the company’s rocky financial performance in 2008.
According to calculations by The Associated Press, the changes to Otellini’s compensation in 2008 bumped the value of his pay package up from the $12.3 million he got in 2007.
However, Intel noted in its annual executive compensation filing with the Securities and Exchange Commission that Otellini’s pay package could have been higher if Intel and its stock had performed better in 2008.
Intel, which is the world’s biggest maker of microprocessors, the brains of PCs, saw its profit fall 24 percent to $5.3 billion last year as sales slipped 2 percent to $37.6 billion. Consumers and businesses were buying fewer PCs, triggering the industry’s worst slump in six years, which decreased demand for the chips that go into those machines.
The rocky performance meant Otellini’s cash bonus of $3.8 million, which is tied to Intel’s performance, wasn’t as big as it could have been under the targets laid out for him by Intel.
The total value of equity awards Otellini received in 2008 was $7.2 million.
However, more than a third of that is made up of stock options that are currently “under water,”…