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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

#221

Post by andromeduck »

lmm wrote: post #46
hakfoo wrote: post #24

Earlier quoted context omitted.

I wonder if they just became terminally risk averse. The thing that made them big is pretty obvious: high-margin premium priced x86 CPUs, which is a position they were able to hold for decades due both to manufacturing excellence and being able to shepherd the standard. They simply can't do it anymore-- execution has stumbled, and the market for x86 is gradually weakening, especially in spaces outside the cut-throat,…

> I wonder if they just became terminally risk averse. > They could have been using decades of margin to build and consolidate positions in other segments of the market. That seems pretty simplistic. Optane and Larrabee were bold efforts. (Heck, so was Itanium). It's not like they didn't try throwing money and R&D at things. But that isn't always enough. > Rather than, say, taking the ARM licenses they ended up flogg…

Think they should have either really stuck it out with Itanium, put more effort into compiler/tooling development or kept up with Xscale.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#222

Post by baq »

tommilukkarinen wrote: post #187

"This was an incredibly dumb move, as employees will become “quiet quitters” and lose morale." Suppose you need to cut employment costs. Is this always better than firing staff? - For employees: you share the burden instead of some facing hard options (firing) so if you are a team player, this is the choice for you. Those who have options in the market, can still leave for greener pastures; if this was the deciding f…

MBAs and bean counters ran this company into the ground in the first place. I’m sure the chain of decisions makes perfect sense given circumstances, but there was no vision to actually do anything seriously other than keep printing money. Lo and behold risk happens slowly then all at once.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#224

Post by baq »

UncleOxidant wrote: post #79
compiler-guy wrote: post #33

Earlier quoted context omitted.

Thinking in terms of quarters rather than years or even decades.

Sure, and that's been the problem with the last couple of CEOs before Pat, but Pat came in expressly saying he was going to take the long view. I suspect that he's visited been by some large institutional investors who don't take the long view.

If he did the right thing he’d have to take an 80% TC cut instead of 25%… stock needs to fall at least 50% from here of dividends are gone.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#225

Post by baq »

PaulDavisThe1st wrote: post #14
Scubabear68 wrote: post #13

I had to double check it wasn’t April 1st. This is a good way to lose your best employees.

If you're one of the best employees at Intel, who are you going to go work for? Choices are limited, and it's quite likely that those others are going to do roughly the same thing.

Intel has more software engineers than hardware engineers. Turns out there’s shit ton of drivers, firmware and validation tools to write and maintain.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#226

Post by KMag »

drblastoff wrote: post #214
mrweasel wrote: post #192

Earlier quoted context omitted.

> 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.…

Studies have shown (take this with a grain of salt because I heard this from a podcast), that dividend stocks and non-dividend stocks have roughly equal returns in the end, with dividend stocks faring slightly worse. This is because dividend stocks tend to appreciate less. So taking $X in dividends every six months ends up being the same as selling $X of your portfolio every six months in the end.

Except that there are often different tax rates between capital gains and dividends. Even if there weren't tax rate differences, reinvesting dividends effectively compounds the tax rate annually, whereas the capital gains tax is a simple rate the year you realize the gain.

Though, in a tax-free retirement account, it's moot.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#227

Post by andromeduck »

causality0 wrote: post #43
hakfoo wrote: post #24

Earlier quoted context omitted.

I wonder if they just became terminally risk averse. The thing that made them big is pretty obvious: high-margin premium priced x86 CPUs, which is a position they were able to hold for decades due both to manufacturing excellence and being able to shepherd the standard. They simply can't do it anymore-- execution has stumbled, and the market for x86 is gradually weakening, especially in spaces outside the cut-throat,…

Man, remember when Intel Xscale was the hot shit for anything mobile? They completely owned the high-end market and then threw it away just a year before the iPhone released.

They had a cloud business too are one point - might have gotten rid of it around 2008?

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#228

Post by baq »

AtlasBarfed wrote: post #150
PaulDavisThe1st wrote: post #14

Earlier quoted context omitted.

If you're one of the best employees at Intel, who are you going to go work for? Choices are limited, and it's quite likely that those others are going to do roughly the same thing.

Let me ask you something. Apple is now year 2 of throwing down the M1/M2 and the shock waves it created. AMD and Intel have to respond with an ARM chip. They just have to. Apple started it, so Qualcomm is going to do it, why wouldn't Samsung do it? Intel has to play talent defense here. At a minimum, these companies are going to need deep x86 people that know how to do fast dynamic compiling transcoding like Apple di…

Intel must have known about apple silicon potential since 2015. It literally took two straight lines with time on x and performance on y to know it will happen if Intel doesn’t improve execution. It didn’t.

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#229

Post by Regnore »

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…

Apple?

Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend

#230

Post by dmurray »

marricks wrote: post #117
manv1 wrote: 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.…

> executive compensation is stock-based If they're cutting executive salaries by the largest amount it sounds good on paper but doesn't really do anything because their pay is, as you said, stock based. So, unsurprisingly, very skeezy unless they change the largest factor in their pay.

Intel is down almost 50% YoY so the execs have already seen a much larger pay cut.

Not that I have a whole lot of sympathy for someone who now makes only $100mm/year, but surely that's variable compensation working as it should.

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