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Intel Cuts Employee Pay to Maintain Quarterly Dividend

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Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#161

Earlier quoted context omitted.

real talent leaves

This. I've had one pay cut in my career, and it immediately made me just up and leave. I don't know why one would tolerate such a thing, unless there was significant up-side still on the table.

Upside might be not having to search for a job in current job market with layoffs happening left and right.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#163

You don’t want a Silicon job because your talent is illiquid. They can take a giant dump directly in your mouth while making steady eye contact and you can’t leave because there is nowhere to go. In software and in startups if you have relevant skills and modern, up to date experience you can switch easily. Don’t work in industries that are declining and have no future and require advanced technical training that is…

Meanwhile ~50% of the EE PhD graduates, and ~10% of the CS PhD graduates from my university are joining Intel on a regular basis.

Intel has a steady funnel of smart international PhD grads who are usually fine with the comparatively lower pay.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#164
post #159

Earlier quoted context omitted.

Depends on the investor. There is an entire class of investor that is focused on stocks that reliably deliver a dividend. I wasn't aware that Intel had joined old-economy companies like oil, but I also don't fully understand the dividend investor mindset, as I can't figure out a tax situation that makes it appealing...

> also don't fully understand the dividend investor mindset Suppose you have ~5 million invested for retirement. The dividend you could get from this is ~100k-150k per year. That is a very livable salary if you want to retire early (45? 50?) and focus on your family and hobbies. Does this make sense yet? It's essentially a conservative way to lead your live if you are not necessarily married to your profession.

No, it absolutely makes no sense to me. Dividends are taxed as income, capital gains is taxed at different rates.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#165
post #159

Earlier quoted context omitted.

> also don't fully understand the dividend investor mindset Suppose you have ~5 million invested for retirement. The dividend you could get from this is ~100k-150k per year. That is a very livable salary if you want to retire early (45? 50?) and focus on your family and hobbies. Does this make sense yet? It's essentially a conservative way to lead your live if you are not necessarily married to your profession.

No, it absolutely makes no sense to me. Dividends are taxed as income, capital gains is taxed at different rates.

>Dividends are taxed as income.

Exactly, you either supplement your income with it or retire early and replace your income with it.

There are whole generations of people doing this.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#166
post #90

If Intel cuts its dividend the stock will crater. Since executive compensation is stock-based, tied to the stock performance, or both, there's an obvious incentive to keep the dividend going. The dividend has become more political than normal. In finance theory, a dividend is supposed to be a paid-out return. If you're cutting salaries to pay the dividend that means that you don't have enough surplus...by definition.…

What does surplus even mean with respect to wages? You could always pay your employees more! So what you mean is surplus is when you pay the market rate wages which in turn suggests the minimum amount of money the company should pay to ensure it gets the workers it needs.

If they cut the salaries and still enough people stay, then the money they saved still is surplus by that definition.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#167

Earlier quoted context omitted.

>> If Intel cuts its dividend the stock will crater Not necessarily. It really makes zero difference to the valuation of a company. Investors really punish companies that can barely cover their dividend (or worse have to borrow). If earnings are bad and revenues are not growing, the dividend is just a hokey shell game that works for about 5 minutes.

Depends on the investor. There is an entire class of investor that is focused on stocks that reliably deliver a dividend. I wasn't aware that Intel had joined old-economy companies like oil, but I also don't fully understand the dividend investor mindset, as I can't figure out a tax situation that makes it appealing...

Yes, of course. Many investors want low risk, inflation proof investments with good dividend yields. However, Intel seems like a poor choice for such investors regardless if they temporarily prop up the dividend via cuts that will inevitably cause harm in the future. After all, what are the chances that Intel will become a higher performing organization as a result of this?

REITs and telcos are a much better choice for this investor class.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#168
post #6

When bailed out banks paid bonuses it was understandably unpopular, but there was a certain logic that retaining talent optimized performance of the remaining bank, and therefore it was ultimately in the interest of taxpayers. It seems surprising that Intel either doesn't think that retaining top talent is in the interest of shareholders, or thinks that investors aren't able to understand the investment. I would assu…

> When bailed out banks paid bonuses it was understandably unpopular, but there was a certain logic that retaining talent optimized performance of the remaining bank, and therefore it was ultimately in the interest of taxpayers. I don't think optimizing the performance of banks the create trillions of debt and were bailed out trillions of dollars is "in the interest of taxpayers".

The US government bailed out banks by effectively purchasing large portions of their assets and tasking the banks with continuing to administer these troubled assets. In the end it worked in that the US eventually was able to sell those assets back at an accounting (though not economic) profit.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#169
post #159

Earlier quoted context omitted.

> also don't fully understand the dividend investor mindset Suppose you have ~5 million invested for retirement. The dividend you could get from this is ~100k-150k per year. That is a very livable salary if you want to retire early (45? 50?) and focus on your family and hobbies. Does this make sense yet? It's essentially a conservative way to lead your live if you are not necessarily married to your profession.

No, it absolutely makes no sense to me. Dividends are taxed as income, capital gains is taxed at different rates.

In the USA, dividends may be taxed at the capital gains rate depending on the company (Intel qualifies) and how long the position has been open.

https://www.investopedia.com/terms/q/qualifieddividend.asp

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