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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

#191

Post by jmholla »

jonas21 wrote: post #149
93po wrote: post #60

Earlier quoted context omitted.

Intel had record revenue in 2021 and $20 billion in profit. There is literally zero reason for cutting pay or jobs except for corporate greed.

It's not 2021 any more. Intel revenue dropped significantly in 2022, meanwhile they were hiring as though the revenue growth would continue. It's a similar story to many other tech companies. But at least at Intel, leadership is taking responsibility by cutting their own pay more than their employees' pay.

Leadership's income is much more closely tied to stock than their wages.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#192

Post by mrweasel »

epistasis wrote: post #148
osigurdson wrote: post #115

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...

> I also don't fully understand the dividend investor mindset

That interesting, because I don't understand the mindset of investors who are just trading stocks like baseball cards. They don't seem to care what the company actually produce, just that the numbers tell them that the stock can sell for a little more next year.

Divided makes a lot of sense, because it keeps yielding money, for the same initial investment. So it's just extra money, but it's money you can actually spend. Sure you pay taxes on the divided, but you still hold the stock and can sell that at a late time.

Honestly I feel that it problems are the companies that never pay divided. The investors then depend on buy-backs or trading to recover their investment. This has created investors that do not care about the companies they invest in. The companies can go broke tomorrow and that's fine, as long as they can sell their stocks before it happens.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#193

Post by adg001 »

int_19h wrote: post #179
adg001 wrote: post #77

If I were an Intel employee I would never accept a pay cut "justified" by the company's willingness to pay dividends. Investors get dividends when the management creates a reasonable amount of profits, not when employees have to waive their dues to do investors a favor.

It's a textbook example of how owners of capital can extract economic rent from wage workers they hire to utilize that capital to produce something valuable. The whole point of any for-profit business that is not worker-owned is to "do investors a favor" with the money obtained by paying workers less than market value of the goods they produce.

No. Employees are neither VCs, nor credit institutions, nor social benefactors, nor non-profit, nor pro-bono volunteers. They work for a wage – And, yes, first hired that joined the ranks of executives with a vetted interest in the company (e.g. stock options) are already something other. Paying the wage is an obligation, if the employers want the work to be provided. Risks – and the associated rewards - are primarily with the investors. A work culture that shifts the risks onto workers has to be rethought.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#194

Post by somethoughts »

Spooky23 wrote: post #19
rz2k wrote: 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…

Where are they going to go? I’m sure the key people won’t hurt as much, but hardware people are pretty screwed overall. Your mastery of some Intel process has not much value in the market. I worked at a tenant in a well funded facility doing semiconductor manufacturing R&D and prototyping. The nicest cars on that lot belonged to the tradesmen running wire and pipe for the tools. A few execs drove fancy cars in their…

This is the challenge with working in the semiconductor industry - you really are captive to Also it is highly likely TSMC pays much less than Intel's process/fab side of the house and works its process/fab teams a lot harder.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#195

Post by readthenotes1 »

echelon wrote: post #184
coldtea wrote: post #126

Earlier quoted context omitted.

> If Intel cuts its dividend the stock will crater. Wait till you see what will happen to the stock when talent leaves the company (whatever it has left, anyway) after such pay cuts...

What is Intel doing here? Investors already know this is deception and the market will value the company accordingly. Intel should face the music and pay the price. Suspend the dividend entirely. (AMD last paid a dividend back in 1995!) Growth stocks shouldn't be dividend stocks. That signals they have nowhere else to deploy the capital and are returning profits to investors. A buyback would be a better way to return…

5% would be insane if inflation weren't 7%. However, cutting salaries to keep the dividend whole is insane.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#196

Post by elihu »

graton wrote: post #181
elihu wrote: post #173

Earlier quoted context omitted.

Good point: it was a loss according to GAAP, but the non-GAAP results weren't a loss. Whereas it looks like they're projecting a non-GAAP loss as well next quarter. (I don't know what the relevant differences are here on GAAP vs non-GAAP.)

GAAP = Generally Accepted Accounting Principles non-GAAP = Whatever we decide? :) Okay, I don't really know. Real info: https://www.investopedia.com/articles/financial-analysis/062...

Yeah, non-GAAP is basically, "we've decided to account for certain things differently because the standard accounting rules would be misleading in our business." Companies could abuse non-GAAP reporting, but there's nothing particularly unusual or nefarious about reporting non-GAAP numbers along with the required GAAP numbers, or treating the former as the more accurate representation of reality.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#197

Post by fzeroracer »

hgarg wrote: post #36

"All employees below Principal Engineer, grades 7 to 11, will get a 5% cut, 10% cuts will be instituted for VPs, and the executive leadership team will take a 15% cut, with Pat Gelsinger taking a 25% cut. " So the OP would rather have Intel fire thousands of employees?

They already are laying people off. The reason why they're instituting the cuts is because they can't bleed critical talent, so instead they're betting on said talent staying even after a pay cut.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#199

Post by impossiblefork »

I don't really see how this can work out.

Intel already has low wages relative to the US software industry and since the work requires a high level of general capability, and often a PhD, for Intel to get top people to build competitive processors should require substantially higher wages than are common in the US software industry and other industries which someone who could easily get a chemistry/solid-state physics/etc. PhD could easily choose instead.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#200

Post by coldtea »

raws wrote: post #161
ryanisnan wrote: post #139

Earlier quoted context omitted.

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.

That wouldn't be a problem for the more talented players - the ones you most want to keep
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