Intel's CEO Brian Krzanich Resigns, CFO Robert Swan as Interim CEO
by Ian Cutress on June 21, 2018 9:00 AM EST
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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BurntMyBacon - Friday, June 22, 2018 - link
@Ratman6161: "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""This is the metric the board will be judging him on. He managed to pull this off despite the 10nm delay, products cancelled, etc. Imagine if everything had gone as planned.
twtech - Thursday, June 21, 2018 - link
Intel made a big deal of it in 2015 when they implemented their new hiring policy based on trying to achieve representative demographics. I don't have anything against hiring more qualified women, different ethnic backgrounds, etc. But when you make it a top goal, you're implying that competence has now taken a back seat to something other than competence, which is usually a bad sign for a company operating in a very competitive industry.At the very least, it has a negative effect on morale/retention for people in the group you've decided you currently have too many of - the best among them just might decide to help you out with your quest to reduce the percentage of employees you have like them, by taking the initiative to quit, and thereby opening up a spot for someone else who will be more appreciated based on the criteria you established.
HollyDOL - Friday, June 22, 2018 - link
In such a highly competitive and cutting tech industry if you give up qualification for sake of anything else... you shoot your own leg. "Almost as good" might not be enough.Spunjji - Friday, June 22, 2018 - link
I don't think you understand quite how this works - these practices when implemented properly do not equal "she's a bit worse but hire her because she's a woman". It is in fact a policy of "when all else is equal, hire based on X". Where the hire would come down to a coin toss, you load the coin. You also make sure your hiring practices are set up to include as many people as possible in the hiring process right from the start, because there are a surprising number of little details in job listings that can subtly suggest to candidates that they may not be welcome to apply.Of course you may still dislike that coin-loading (and that's fair), but it is necessary to address the fact that when all else is equal most companies still default to hiring able-bodied men with names they can pronounce easily. There are a whole bunch of reasons for that and they come down to implicit biases, some of which are harmless on a personal level and many of which seem like common sense.
This rather awkward process needs to be done for the health of the entire industry, though, because the end result is that you *will* be choosing the best available talent from all demographics, rather than what we have now: where you only get the best out of the people who already self-selected in the belief that they were likely to get the job (which in this area ends up being a lot of able-bodied white guys).
HollyDOL - Friday, June 22, 2018 - link
From practical experience, "traits" are not secondary criteria when "skills" are equal, but rather on same level where they pick max(skills+traits), in some cases traits even outweight skills for whatever reason (example: political pressure on various form of equality/positive/negative/whatever discrimination you simply have to live if you want to be on good side of authorities).But ofc all that depends both on corp policy and specific set of recruiters as their decision will always and inevitably be subjectively influenced - the better the recruiters the smaller subjective impact.
BurntMyBacon - Friday, June 22, 2018 - link
@SpunjjiWhat you say is true in the ideal sense and that is where things should eventually converge. However, there are a few complications that make the reality less than ideal in the short to mid term.
First is the natural outcome of forcing a diversity policy on a large company that historically had none. With said policy comes a metric for measuring it and a goal to be met. Otherwise, there is no point. Unfortunately, in a large company, they population percentages are not as easy to change as in a small one due to "the large population". Given this difficulty, the set goals may be unreasonable and potentially influenced by outside forces (Government mandate, public image, etc,), though sometimes it is simply an internal leadership decision. This puts more pressure on HR to hire the low populations and certainly fuels the good enough mentality.
The second issue with a large company is that hiring is handled inconsistently between sites (particularly when some sites reside in other nations). To meet company wide diversity goals, some sites may need to put in "more effort" to make up for other sites.
The third is diversity of available applicants. This can be influenced heavily by location and can make it difficult to reach the company diversity goal, once again putting undue pressure on hiring the missing diversity groups in other parts of the company.
The fourth is the fact that no two applicants are actually equal. Historically, (whether due to culture, natural tendencies, or some other factor) different groups tend to exhibit different strengths. While this helps explain some of the uniform population issues, this shouldn't be considered in an individual hiring decision as there are always exceptions and the strengths of any particular group will change over time. When looking at two individuals, there are always differences that may be more or less important. While you may get a candidate that is universally superior to another, more often each candidate has at least some traits that are superior to the other. The decision comes down to who has the more important traits. Sometimes it is unclear who the superior candidate is and the decision is based on past experience and certain assumptions about the candidates. This is where the diversity policy should ideally be applied. However, detractors would argue that at this point you would be better off considering factors that influence team cohesiveness and have a better effect on overall morale. This is one of the reasons that lead to the lack of diversity in the first place.
Once the targeted diversity goal is met, most of these issues disappear and it becomes much easier to maintain diversity without sacrificing some amount of competency. There are still trade-offs, but job competency shouldn't be as much of a concern.
peevee - Friday, June 22, 2018 - link
"Once the targeted diversity goal is met, most of these issues disappear and it becomes much easier to maintain diversity without sacrificing some amount of competency"Nope. If you stop enforcing the policy, the distribution of people of various sub-population will start to go back according to the distribution of desirable traits in those subpopulations, which are not the same.
Using race in hiring decisions is RACISM. Using gender is SEXISM. No matter which side is hurt.
peevee - Friday, June 22, 2018 - link
"It is in fact a policy of "when all else is equal, hire based on X""That would apply to exactly 0 cases, because no people are ever equal to each other.
In reality it works exactly as described - when HR is tasked with hiring more X than Y, they WILL discriminate against Y to achieve the goal or their performance will be evaluated negatively.
close - Friday, June 22, 2018 - link
@Spunjji, what you're saying is a quote from the company policy. That looks good for the PR. Also it's a fairy tale. In practice in never ever works like that. Because the theory leaves the door wide open for a case where you can't find "all other things equal" type of candidate. But the "quota" is there and the people doing the hiring have to meet it or they take the blame.So what actually happens is that they won't have time to hire based on merit, they will put other criteria first. And sometimes "close second" is not good enough.
peevee - Friday, June 22, 2018 - link
Yep, I bet this stupidity has contributed to their recent troubles in a big way.