
Intel's CEO Just Sold a Lot of Stock - endymi0n
https://www.fool.com/investing/2017/12/19/intels-ceo-just-sold-a-lot-of-stock.aspx
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dbcurtis
Is it simply part of a regular sales plan? When I was at Intel, any execs that
were classified as insiders had such narrow windows when sales were legal, and
were under such scrutiny, that they often set up a stock sales calendar to
allow sane divestiture of their option-based compensation. There is no meaning
to be read into a fixed schedule.

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craftyguy
The interesting part is that he's only keeping the bare number of shares that
he is required to keep. This suggests that he'd likely be 0% invested in the
company (i.e. holding 0 shares) if he had the chance to, meanwhile he
continues to try to persuade employees to retain Intel stock to "stay invested
in the company."

~~~
w0m
Staying invested in the company and locking your financial future to it are
very different things - diversification is ~almost always a good/sane thing to
do. Personally, I tend to sell all of my employers stock when I get it and
diversify, though I keep 1 share to 'stay invested'.

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mikestew
Keeping the bare minimum number of shares, is he? And that's a bad thing?
Well, tell me the number of pieces of flair, err, I mean shares he should hold
to be acceptable. Kidding aside, the article did read as hunting for
_something_ to make out of this. I mean, if he holds the minimum number of
shares that company requires of a CEO, that's $11 million. Just how many of
his eggs does he need to keep in that one basket?

~~~
michaelt

      Just how many of his eggs does he
      need to keep in that one basket?
    

Many executives receive very high total compensation, but structure it in a
certain way as a sort of fig leaf to pretend it's in the shareholder's
interests.

For example, instead of being paid $12,000,000 a CEO might pay themselves
$2,000,000 in cash and award themselves $10,000,000 in stock. The fig leaf in
that case is that it aligns his incentives with those of shareholders. There's
totally not a principal-agent problem here, honest!

Selling all $10,000,000 of shares kinda reveals that fig leaf for what it is:
giving himself the shares was never about aligning his incentives with
shareholders - he just wanted the cash.

If shareholders' interests were represented competently and in good faith,
you'd expect a very different incentive structure.

~~~
elihu
Doesn't the board of directors usually set the CEO's compensation, not the CEO
him/herself?

Also, I don't think the stock is a "fig leaf" \-- it actually is in the
shareholder's interests that CEOs hold a lot of stock. I can't think of any
other explanation why the compensation of (non-founder) CEOs is so high. I
suspect that if a CEO were to refuse to accept stock it would make
shareholders uncomfortable. The stock is what incentivizes the CEO to act in
the interest of shareholders when those are contrary to the interests of
employees or customers.

~~~
michaelt

      it actually is in the shareholder's
      interests that CEOs hold a lot of stock
    

Absolutely. So why do they let him sell it?

~~~
elihu
Because stock often makes up most of a CEOs compensation. Most people wouldn't
want to have their pay locked up for long periods of time somewhere they can't
spend it. So, companies like Intel can set up some agreement that says they
can sell some of it as long as they keep some minimum amount.

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proto-n
Could be related to [1]?

[1]
[https://news.ycombinator.com/item?id=16052451](https://news.ycombinator.com/item?id=16052451)

~~~
endymi0n
Obviously not. What could an unfixable CPU design bug that will impact every
Intel processor (and cost up to 30% performance through the neccessary fixes)
possibly do to the companies‘ stock price? /s

~~~
Moral_
This "bug" is so blown out of proportion it's sickening. It breaks KASLR, a
thing no one uses.

~~~
exportgoldman2
Wrong. Wrong. Wrong. Sigh.

This bug allows a user level process or even a website to read any memory on
the pc, including memory of another vm on the same box.

Bitcoin wallets, passwords, keys, all up for grabs by anon.

Can't be fixed by intel so all os providers have to implement fixes in os
which slow down pc by approx 30%.

So you gaming pc or aws instances just cost more

~~~
candiodari
There are many reasons to just get a dedicated machine, especially given that
they're like $10/month these days. (kimsufi, hetzner, ...)

This is a major one. On a dedicated box, as long as ssh and your http server
are secure, you can run a compromised kernel. In practice, of course, it
mostly means that there's an extra layer of exploit necessary before attackers
are in. Everybody should insist on that, always.

Performance is another one (to put things bluntly: a 2-year-old atom with 4G
straight on hardware, on 99% performance, beats a Quad Xeon with 96 Gigs of
ram where you're 1 out of 100 VMs. And even that undersells it. In practice on
that quad xeon it will regularly take 1s to jump into your code for a web
request. Not generating a response, just the time before it actually processes
your packet. If you're I/O bound (ie. every single website), the lowly
dedicated Atom will beat the big bad Xeon).

And lastly, included network capacity is the third one. The cheapest dedicated
on hetzner comes with $3000 worth of network (Google cloud prices, Amazon's
are more expensive, and yes it's FUP bandwidth, so presumably you can use like
$500 of it without problems if you're paying $10, not the full $3k)

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vorotato
I think people waste a lot of money betting on the significance of CEO sales.

~~~
arcticfox
Exactly, this is a logical move to rebalance his net worth outside of Intel.
Otherwise he's got a whole lot of eggs (including his career) in one basket.

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prklmn
So he’s the CEO who knows the most intimate details about his company,
including what the next few years hold. If as CEO he’s not confident enough to
have a whole lot of eggs in the company that HE is running, why would anyone
in their right mind want to have a single egg in this company?

~~~
thephyber
I don't follow this logic.

Different investors have different risk appetites.

If in your mind, the CEO sells one share of the company's stock and all of the
investors should sell that stock, I think it would be a fantastic time to buy
into the stock.

~~~
prklmn
I think holding the minimum amount of stock, as he is doing, is a far cry from
selling one share. I understand you can’t buy stuff to live with stock, so
he’ll need to sell some, but there’s a big difference between selling some and
selling the maximum you’re allowed to at every opportunity.

~~~
justmightbecraz
Correct, if he needed some cash freed up immediately he should cash out shares
of an investment fund, not dump shares of the company he's CEO of.

And while the technical issue discussed elsewhere may play a role in people's
minds, keep in mind that if it's only the CEO dumping stock he might be
cashing out ahead of a #metoo

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ericb
Even if he thinks the company will do well, selling at the PE multiple the
market is giving now probably makes sense.

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oh_sigh
Doesn't this make sense? Sell the shares now. If he does well over the next 3
years, he will be rewarded with more stock grants. If he does poorly, he will
probably be out of a job but at least he has the money from this sale (and
much more, I'm sure)

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jboles
Really suspicious timing in light of today's announcement.

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mikeokner
A $60 price in 2021 is about 7% growth per year which is about average for the
market as a whole over the past 50ish years, but significantly lower than
current market growth and especially current tech sector growth. Still, it
looks pretty terrible as CEO to be dumping every last share you're allowed to.

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m0thr4
Nothing to do with this then?
[https://forums.theregister.co.uk/forum/1/2018/01/02/intel_cp...](https://forums.theregister.co.uk/forum/1/2018/01/02/intel_cpu_design_flaw/)

I imagine Apple's lawyers will be sharpening their knives, considering how
deeply they're in with Intel. This is going to cost Intel dearly... and will
surely affect the share price, regardless of the _actual_ threat it poses.

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theclaw
The article is a week old, and so predates the public disclosure of the bugs.
He knew what was coming.

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onerioi
If you lose anything because of the bug, find a good lawyer. I'm sure there
are a few that would love to go after this CEO's billions. He should pay
because he was paid a lot to run Intel right, and didn't.

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39u8hifler
He knew and he sold shares ahead of everyone else. Why is this legal?

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yakitori
Smart. INTC is at a 15+ year high in a huge bull market. Just makes sense to
shave some off.

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rajacombinator
These guys can dump their shares whenever they want, secretly, via private
contracts. Pointless trying to read anything into public data.

~~~
fjsolwmv
That's illegal and expensive id discovered

