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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  • CaedenV - Thursday, June 21, 2018 - link

    I'm sure he did something at Intel... But from the outside looking in it looks like they rode out Otellini's product pipeline, squandered a few launches, let the marketing department go insane with relabeling what i3-9 chips are and created ever more confusing skus of metalic named server products, and then reacted poorly the last year with AMD's comeback. I am all for some new leadership in Intel. Reply
  • Kevin G - Thursday, June 21, 2018 - link

    To expand on this a bit, BK did do something while at the helm: lots of acquisitions. While their core business has indeed taken a hit waiting on 10 nm issues to be worked out, BK was rapdily trying to expand into other markets. (Note that BK took over when the company missed their golden opportunity in ultra mobile which they've since ceded to ARM.)

    It is this excessive spending that will really hurt Intel which the next CEO will have to correct. This is a very, very similar story to what happened to HP.
    Reply
  • BurntMyBacon - Friday, June 22, 2018 - link

    @Kevin G: "It is this excessive spending that will really hurt Intel which the next CEO will have to correct."

    What is this statement based on? Ratman was saying above that Intel recently posted its best quarterly financial report ever. If this is indeed true, then it is hard to say the excessive spending hurt Intel.
    Reply
  • Kevin G - Friday, June 22, 2018 - link

    It is about the time frame for spending and what Intel has available to spend. Fabs aren't cheap and Intel should have started to purchase 7 nm equipment to start retrofitting existing facilities. As Intel is currently ramping up 10 nm, needless to say that 7 nm purchasing isn't ready. That works out to billions of spending that has essentially been deferred to the next CEO's term. Intel has also made commitments to go to 5 nm which is even more expensive, though unclear when this will be ready.

    As for their fiscal report in the first quarter of this year, Intel's debt and cash on hand figures nearly cancel each other out. Intel is no where near fiscal collapse like AMD was recently, just that they'll likely have to taken on debt that could have been prevented if the CEO didn't go on an acquisition spending spree. They'll likely have to dip into the red for a bit. Investors will not be pleased.

    This is also without the context that Intel is under competitive pressures from AMD and ARM based designs. Intel is also facing delays to get Spectre/Meltdown fixes into hardware too.
    Combine the necessary expenses with a reduction in revenue due to lost market share in their cores businesses, things aren't looking so rosy in the mid to long term.
    Reply
  • Spunjji - Friday, June 22, 2018 - link

    To be fair to Intel, I'm not sure they reacted poorly - they've been able to quite handily counter AMD at every level they've chosen to. They *have* given the impression about not being prepared for it in advance, though, which is a bit pants. Reply
  • BurntMyBacon - Friday, June 22, 2018 - link

    Agreed. They've been able to keep things pretty well under control. Their financials could have been a lot worse than they are. On the other hand, their future prospects are less clear. I have no doubt that Intel will still be the 800lb gorilla of the industry, but will their short term decisions cede more market share to their competitors than necessary. We'll have to wait and see. Reply
  • FunBunny2 - Thursday, June 21, 2018 - link

    "10nm delay after delay under him essentially hurting all of their core businesses, products cancelled or endlessly delayed under him."

    unless he's a scientist/engineer who knows the most of the most about building 10nm, you really can't blame him directly. OTOH, if he engaged in punitive retribution against those who did, for personal reasons, and thus 10nm went in the tank; then he gets the blame. until such behaviour is reported, he's just the unlucky guy at the top who gets the praise/blame for what happens down deep in the corporation.
    Reply
  • rocketbuddha - Thursday, June 21, 2018 - link

    He is from a manufacturing background. Other CEOs were from a Tech background or Engineers. Since the problem is purely related to manufacturing and under his watch Intel let Samsung, TSMC and GF take the lead from having a 18+month head start at the start of his tenure, he is more to answer for than prior scenarios.... Reply
  • Gigaplex - Friday, June 22, 2018 - link

    I'm not convinced anyone has taken over the lead. While Samsung et al were earlier with a new process with the 10nm branding, their process nodes are typically larger than Intels as they use different metrics to come up with the branding. Also, Samsung got there by violating patents and got sued. Reply
  • peevee - Friday, June 22, 2018 - link

    "as they use different metrics to come up with the branding"

    Nobody uses any metrics for the branding since 1997. Pure marketing BS. Intel has actually UNDERbranded their processes from "180nm" all the way to "45nm", based on their (and generally accepted back then) previous metric of gate length (130nm for "180nm" process, 25nm for "45nm" process). Then they could not decrease gate length anymore (it is ~45nm for their "10nm" process and other's "7nm") and they had to increase density in other ways (for example using thinner wires with higher resistance, wasting more power at any given voltage), they continued decrease the number which completely disconnected from what it has been before.
    Reply

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