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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  • peevee - Friday, June 22, 2018 - link

    No, other parameters decreased instead of gate length, like spacing between elements and wire widths (with which they could get away by decreasing voltages, otherwise neither would work).

    Intel's proposal of using transistors per sq mm (in specific distribution of elements, 60% NAND and 40% flip-flops AFAIR) was quite reasonable, but the rest of the industry did not take the bait given that their claims of feature size are even more exaggerated now than Intel's.
    Reply
  • peevee - Friday, June 22, 2018 - link

    "The actual metric is critical half-pitch, the spacing BETWEEN transistors, as that is a fairly straightforward stand in for density."

    It was not this way when all that (micrometer then) stuff started in the 80s and to the end of the 90s.

    And 10/7nm does not relate to any half pitch anymore either.
    Reply
  • Martijn ter Haar - Thursday, June 21, 2018 - link

    Is Krzanich (still) under investigation by the SEC for selling his stock options shortly before the Meltdown/Spectre stuff became public? Reply
  • Reflex - Thursday, June 21, 2018 - link

    I don't think he was ever investigated for that since it 1) was a preplanned/scheduled sale, and 2) cost him money since the stock has gone up since then. Reply
  • none12345 - Thursday, June 21, 2018 - link

    Except the preplanned sale was planned AFTER they knew about the flaw, and BEFORE they told the public about the flaw. So...preplanned sale doesnt fly with me.

    The stock going up after has nothing to do with it. If you commit and crime and have a bad outcome, you are not forgiven for the crime. (NOTE i am not saying a crime was commited). I personally beleive its insider trading, but thats just a personal belief.
    Reply
  • Spunjji - Friday, June 22, 2018 - link

    Yeah, I'd have liked to see a little more scrutiny there, even just from the press. It came across very badly and none of the explanations given hold much water. Reply
  • Reflex - Friday, June 22, 2018 - link

    It may not fly with you, but its tough to investigate such a thing when the CEO lost money by doing it. I don't think its reasonable to say that if they know there is any problem they can't sell any shares. It would be tough to even determine at what point one could say when the fallout was over.

    Based on the market response, it would be fair for any response to an investigation to be "I didn't anticipate it having any significant impact on our share price" and then they look at the share price and see he was correct.

    Not defending it. I shouldn't have to qualify this by pointing out that I have a Ryzen. But insider trading is very serious and has explicit conditions that do not appear to have been met here. The original post asked if he was 'still under investigation' but so far as I am aware no such investigation happened at all. Does anyone have a link?
    Reply
  • Oxford Guy - Tuesday, July 3, 2018 - link

    Great logic there. Just because a crooked business maneuver doesn't pan out the way the crook hopes it means it's not crooked! Reply
  • Oxford Guy - Tuesday, July 3, 2018 - link

    No, he clearly sold the stock out of pure altruism. To save the whales or something. Ask Reflex about it. Reply
  • psychobriggsy - Thursday, June 21, 2018 - link

    Great way for him to leave before the proverbial hits the fan when 10nm (or lack of) bites hard next year.

    But yeah, this is either him resigning on a high before the disaster, with an excuse to cover why he would be leaving; or he was fired (aka 'asked to resign').
    Reply

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