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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  • mpbello - Thursday, June 21, 2018 - link

    Everything falls on the CEO.

    Intel's top management lacks transparency and I thought the 10nm "launch" which was actually a PR Stunt would eventually take him down. I am hoping the new CEO will understand the need to be more open and transparent.
    Reply
  • close - Friday, June 22, 2018 - link

    And for good reason. He takes the top $, why would someone else take the responsibility? This is what should come attached to the tens or hundreds of millions of dollars and the golden parachutes that CEOs get.

    And don't forget he started as an engineer at Intel. This is why most CEOs in large companies are either the founders, or people who actually understand the business and started by doing, not by managing. So they can't claim ignorance. No, just like the CEOs in the auto industry who were perfectly aware of what was going on, BK has no excuse for his failure.
    With great power (and full control) comes great responsibility.
    Reply
  • CaedenV - Thursday, June 21, 2018 - link

    You are not wrong. The Intel does not do the work, but Intel gets people in the right positions to get things done. Things have not been getting done. Reply
  • peevee - Thursday, June 21, 2018 - link

    " I think that falls on the engineers."

    It does. But who ARE the employees is determined by hiring and retention decisions of the management, recursively all the way to the board. If they have lost their competent engineers and managers to competitors, it is not the fault of the engineers.
    Reply
  • Gigaplex - Friday, June 22, 2018 - link

    Or maybe they haven't lost anyone, still have the best engineers, and that 10nm is just a really, really hard problem to solve. Reply
  • Spunjji - Friday, June 22, 2018 - link

    It's not trivial for sure, but when your competition are catching up on what was previously a 3 year lead in that area then *something* has gone a bit wrong.

    Still agree that it's not exactly his fault mind you.
    Reply
  • peevee - Friday, June 22, 2018 - link

    "Or maybe they haven't lost anyone, still have the best engineers, and that 10nm is just a really, really hard problem to solve."

    Given that everybody else has solved it in much shorter period of time (they just call it 7nm), this is unlikely.

    Large stupid corporations lose the best engineers all the time, hiring useless MBAs or fakers in India etc. It is much more likely that Intel is just like that.
    Reply
  • Ratman6161 - Thursday, June 21, 2018 - link

    Also a board of directors isn't going to get too critical over technical decisions when "Intel recently posted its best quarterly financial reports ever" Reply
  • twtech - Thursday, June 21, 2018 - link

    @Ratman, I think that also depends in part on how technical and forward-looking they are though. Their financial performance right now might be great, but if they fall behind rivals in manufacturing, how long will those profits continue to roll in? It's not just AMD they have to worry about, but non-x86 as well. Reply
  • close - Friday, June 22, 2018 - link

    If you're on the board and judge only by looking at yesterday's results you're in the wrong room. Reply

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