This morning Intel released a formal press release stating that Brian Krzanich, now former CEO, had resigned. Current CFO Robert Swan has been named the interim CEO while the company looks for a replacement.

As Intel does not have an immediate replacement, the resignation seems to be a snap decision relating to what Intel calls ‘a past consensual relationship with an Intel employee’ (believed to be a direct subordinate), and an expectation that employees adhere to a code of conduct regarding relationships.

Sources have told CNBC that 'Krzanich violated a policy that said he could not have a relationship with an employee who directly reported to him. The relationship ended and took place "some time back," the people said. It's unclear with whom Krzanich had the relationship. The company was only recently made aware of the relationship, at which point they began probing and Krzanich was asked to resign'. 

Intel’s Board of Directors accepted Krzanich’s resignation and it was formally announced this morning. Krzanich has also departed the Board of Directors as well.

Robert Swan, Intel’s Chief Financial Officer, will sit in the CEO seat effective immediately while a search has begun for a replacement for Krzanich. Swan’s credentials include nine years at eBay, and also time at Electronic Data Systems Corp, both positions held as CFO.

Intel's Chairman of the Board, Andy Bryant, said in a statement:

"The Board believes strongly in Intel's strategy and we are confident in Bob Swan's ability to lead the company as we conduct a robust search for our next CEO. Bob has been instrumental to the development and execution of Intel's strategy, and we know the company will continue to smoothly execute. We appreciate Brian's many contributions to Intel."

Krzanich joined Intel in 1982 as a process engineer in one of the company's fabs in New Mexico, before coming manager of the plant, and rising through the system to COO in 2012 and CEO in May 2013. Under Krzanich’s leadership, Intel has diversified its product portfolio into new areas, such as FPGAs, IoT, Mobile, Wireless, autonomous vehicles, networking, 3D XPoint memory, and saw the company through successive generations of new processors, aiming to turn the company from a PC-centric business to a data-centric business (to use Intel's own terms). Key points along the way have been the drive for conflict-free materials, as well as diversity initiatives, with recent investment into other areas such as eSports.

As a result, Intel recently posted its best quarterly financial reports ever, and the stock and value of the company continues to grow, leading to an overall 120% growth since 2013. Counter to this, Krzanich has also had to steer the company through the current issues surrounding their next generation 10nm process technology, which is was expected to be an integral part of the company portfolio last year, but is facing further delays. Also in recent months the announcements regarding Spectre and Meltdown vulnerabilities have also become public. Krzanich's page on Intel's website is no longer present.

CNBC reports that in 2017, Krzanich's total compensation topped $21m.

Intel states that ‘the board has a robust succession planning process in place and has begun a search for a permanent CEO, including both internal and external candidates’. Initial feelings from analysts suggest that internal candidates such as Dr Murthy Renduchintala might be in the running for the top spot.

Intel's press release is as follows:

SANTA CLARA, Calif. – June 21, 2018 – Intel Corporation today announced the resignation of Brian Krzanich as CEO and a member of the board of directors. The board has named Chief Financial Officer Robert Swan interim chief executive officer, effective immediately.

Intel was recently informed that Mr. Krzanich had a past consensual relationship with an Intel employee. An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternization policy, which applies to all managers. Given the expectation that all employees will respect Intel’s values and adhere to the company’s code of conduct, the board has accepted Mr. Krzanich’s resignation.

“The board believes strongly in Intel’s strategy and we are confident in Bob Swan’s ability to lead the company as we conduct a robust search for our next CEO. Bob has been instrumental to the development and execution of Intel’s strategy, and we know the company will continue to smoothly execute. We appreciate Brian’s many contributions to Intel,” said Intel Chairman Andy Bryant.

Intel expects to deliver a record second quarter, with revenues of approximately $16.9 billion and non-GAAP EPS of approximately $0.99. With accelerating data-centric revenue, the company is off to an excellent start in the first half of the year and expects 2018 to be another record year. Intel will provide full second-quarter results and an updated outlook for the full year on the second-quarter earnings call on July 26.

As interim CEO, Swan will manage operations in close collaboration with Intel’s senior leadership team. Swan has been Intel’s CFO since October 2016 and leads the global finance, IT and corporate strategy organizations. He previously spent nine years as CFO of eBay Inc. Earlier, he was CFO of Electronic Data Systems Corp. and TRW Inc. He has also served as CEO of Webvan Group Inc.

Swan added, “Intel’s transformation to a data-centric company is well under way and our team is producing great products, excellent growth and outstanding financial results. I look forward to Intel continuing to win in the marketplace.”

The board has a robust succession planning process in place and has begun a search for a permanent CEO, including both internal and external candidates. The board will retain a leading executive search firm to assist in the process.

Source: Intel

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  • Reflex - Thursday, June 21, 2018 - link

    (flip to the one year view, it defaults to the daily view) Reply
  • HStewart - Thursday, June 21, 2018 - link

    To me it looks like since this Spectre/Meltdown - Intel stock actually raise - yes it lower since the beginning of month and two points today - but still 10 points higher than beginning of the year.

    Keep in mind both AMD and ARM cpus also have issues - not just Intel.
    Reply
  • peevee - Thursday, June 21, 2018 - link

    So sad to see once great American company go down because of various offshoots of political correctness, from hiring and promoting NOT the best but people with "right" race or gender to the meddling in employee's personal affairs.

    Ask yourself if Samsung and TSMC promote "diversity" over competence and fire competent people because of their private affairs.
    Reply
  • Ej24 - Thursday, June 21, 2018 - link

    Huh? Where did this come from? He banged someone that directly reported to him. That's an abuse of power. How do we know he didn't offer a promotion in return for sexual favors? When you're ceo you don't get to have sex with employees. Reply
  • Qwertilot - Thursday, June 21, 2018 - link

    The point is that (as made very clear over the past year or so) you don't even need to actually explicitly mention anything for the power relationship to make things very uncomfortable for the other side.

    Very sensible policy I'd think.
    Reply
  • Ej24 - Thursday, June 21, 2018 - link

    I agree with you. My confusion was with the previous comment that I was replying to. Reply
  • peevee - Thursday, June 21, 2018 - link

    "He banged someone that directly reported to him. That's an abuse of power."

    Not necessarily AT ALL.
    If he threatened to fire for not having sex, or offering company benefits for that, that would be abuse of power. Sex between 2 consenting adults is not.
    Reply
  • Ej24 - Thursday, June 21, 2018 - link

    When someone holds power over you, whether or not they threaten to use it, can you really make the same decisions as you would have if they were a total stranger? Probably not. Reply
  • peevee - Friday, June 22, 2018 - link

    About my private, including sex life? Absolutely the same. Reply
  • ElvenLemming - Thursday, June 21, 2018 - link

    He might not have actually abused his power in any way, but the possibility is reason enough for Intel to forbid such relationships. Reply

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