Intel will pay former CEO Pat Gelsinger up to $10 million

Outgoing Intel CEO Pat Gelsinger is expected to receive up to $10 million if he leaves the struggling tech giant.

Gelsinger will receive his annual base salary of $1.25 million or $1.8 million for 18 months and 1.5 times his target bonus of $3.4 million or $5.16 million $, which will be paid out over the next 18 months, Intel said (INTC-4.58%) said in a Application for admission on Tuesday.

Gelsinger will also receive a payment equal to 11/12 of his 2024 bonus – which depends on company performance – that he would have received had he not resigned. That would be a little over $3 million.

His departure comes as the chipmaker struggles to keep up with major rivals like Nvidia (NVDA+0.28%) in the boom of artificial intelligence. Intel has also been an issue in recent months Interest from activist investorsincluding a possible takeover bid as performance has lagged.

Intel was at the beginning of November kicked out of the Dow Jones Industrial Average to make way for Nvidia, hailed as the “AI darling.” Intel shares have fallen more than 52% in 2024 since Tuesday, while its rival’s shares have risen more than 188%.

Although Gelsinger’s resignation was announced Monday morning, it came after some time CNBC reports was a contentious board meeting due to a lack of confidence in the CEO’s plans to compete with Nvidia.

Gelsinger was the company’s first technical director before leaving the company. He returned to in 2021 take over for then-CEO Bob Swan to stabilize and modernize the company.

“It has been a challenging year for all of us as we have made difficult but necessary decisions to position Intel for current market dynamics,” Gelsinger said in a statement on Monday.

As the board searches for a new boss, the Santa Clara, Calif.-based tech giant named David Zinsner and Michelle Johnston Holthaus as co-CEOs. Frank Yeary, Intel’s independent chief executive and interim chairman, said the pair will continue the company’s mission to simplify and strengthen Intel’s product portfolio, improving manufacturing and foundry capabilities while reducing costs.

“While we have made significant progress in restoring manufacturing competitiveness and building the capabilities to become a world-class foundry, we know we still have work to do within the company and are committed to restoring investor confidence,” said Yeary in a statement.

“We are working to create a leaner, simpler and more agile Intel,” he said.