Intel CEO resigns over relationship with employeeBy MUNSIF VENGATTIL and STEPHEN NELLIS
June 22. 2018 12:48AM
Intel Corp. Chief Executive Brian Krzanich resigned on Thursday after a probe found a consensual relationship with an employee violated company policy.
The head of the largest U.S. chipmaker is the latest in a line of powerful men in business and politics to lose their jobs or resign over relationships viewed as inappropriate, a phenomenon highlighted by the #MeToo movement.
“An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternization policy, which applies to all managers,” Intel said in a statement.
The board named Chief Financial Officer Robert Swan as interim CEO and said it has begun a search for a permanent CEO, including internal and external candidates.
Intel declined to give any further information about the probe. Its shares fell 2 percent.
The company’s board was informed a week ago that Krzanich had a mutual relationship with an employee in his chain of command in the past, according to a source familiar with the matter who asked not to be named.
Intel’s policy, which dates back to 2011, requires employees to report any colleague’s relationship with a subordinate if they come to know about it, the source added. Intel has fired managers before for violating the policy.
Krzanich, who did not have an employment contract, is entitled to a $38 million “walk-away” payment in the event of a voluntary termination, according to Intel’s regulatory filings.
Of that, $31 million is in the form of accelerated stock awards and $4.1 million is in the form of deferred compensation, based on Intel’s share price on Dec. 29.
An Intel spokesman declined to say whether the walk-away payment applied to Krzanich’s resignation.
Krzanich, 58, an engineer and Intel veteran known at the company as “BK,” was appointed CEO in May 2013. He led the company’s shift to focus on making chips for data centers that power cloud computing from its traditional stronghold in personal computers. Intel shares more than doubled during his tenure.