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Intel shareholders rejected the company’s executive pay program—putting the CEO’s promised $180 million pay package on the line

These compensation proxy items are just advisory votes. I've never read about an executive's contract or employment agreement that mentioned these advisory votes in any way, no less with negative ramifications. So these votes are just one step short of meaningless.
 
These compensation proxy items are just advisory votes. I've never read about an executive's contract or employment agreement that mentioned these advisory votes in any way, no less with negative ramifications. So these votes are just one step short of meaningless.
That's interesting, because in the UK these shareholder votes on exec compensation actually matter and make a difference.

So if the US system is to ignore them, I find this rather strange. Should the wishes of the shareholders - the owners of the company - just be ignored ?

UK policy (from 2013):

"Shareholders will have a binding vote on a resolution to approve the directors’ remuneration policy. The remuneration policy will set out how the company proposes to pay directors, including every element of remuneration that a director will be entitled to and how it supports the company's long-term strategy and performance. The policy will also include details of the company’s proposed approach to recruitment and loss of office payments. Companies must put the remuneration policy to a shareholder resolution at least every three years. If a company wishes to make any changes to the remuneration policy it will have to put the new policy to shareholders for approval at a general meeting."
 
That's interesting, because in the UK these shareholder votes on exec compensation actually matter and make a difference.

So if the US system is to ignore them, I find this rather strange. Should the wishes of the shareholders - the owners of the company - just be ignored ?

UK policy (from 2013):

"Shareholders will have a binding vote on a resolution to approve the directors’ remuneration policy. The remuneration policy will set out how the company proposes to pay directors, including every element of remuneration that a director will be entitled to and how it supports the company's long-term strategy and performance. The policy will also include details of the company’s proposed approach to recruitment and loss of office payments. Companies must put the remuneration policy to a shareholder resolution at least every three years. If a company wishes to make any changes to the remuneration policy it will have to put the new policy to shareholders for approval at a general meeting."
I think I like the UK rules on this topic better!
 
The effectiveness of the resolution really depends on Intel's Board of Directors.

The current Intel's board are full of nice people but not enough right people. The current composition of their board is not suitable for a semiconductor company as big as Intel is and as complicated as Intel is. Other than Pat Gelsinger, I can't see a second board member who really has experience in operating/managing a major semiconductor related business. Take a look their bios here:


And if you have extra time, take a look TSMC's:

 
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The effectiveness of the resolution really depends on Intel's Board of Directors.

The current Intel's board are full of nice people but not enough right people. The current composition of their board is not suitable for a semiconductor company as big as Intel is and as complicated as Intel is. Other than Pat Gelsinger, I can't see a second board member who really has experience in operating/managing a major semiconductor related business. Take a look at their bios here:


And if you have extra time, take a look TSMC's:

Agreed, and if only this was just an Intel problem. IMO, unqualified board members are a significant problem of many (perhaps most) US companies. Take a look at the Applied Materials BoD, for another example. The boards hire people with impressive-looking resumes from various fields, not experts in what the company does. Some board members are, justifiably, experts in corporate finance, government matters (companies like Apple with global anti-trust problems come to mind), customer / market matters, etc, but in the US most BoDs simply won't be qualified to judge strategy or technical direction. And I don't think the CEOs or board chairpersons are looking for technical activists as board members. The BoD membership is mostly for show, IMO. Sometimes they are called upon to vote on something sensitive, like Intel's "forcing out" of Brian Krzanich as CEO for, uh, you know, with a female subordinate in 2018, but mostly, IMO, BoDs are just for-show oversight. It is alarming, to say the least.
 
Agreed, and if only this was just an Intel problem. IMO, unqualified board members are a significant problem of many (perhaps most) US companies. Take a look at the Applied Materials BoD, for another example. The boards hire people with impressive-looking resumes from various fields, not experts in what the company does. Some board members are, justifiably, experts in corporate finance, government matters (companies like Apple with global anti-trust problems come to mind), customer / market matters, etc, but in the US most BoDs simply won't be qualified to judge strategy or technical direction. And I don't think the CEOs or board chairpersons are looking for technical activists as board members. The BoD membership is mostly for show, IMO. Sometimes they are called upon to vote on something sensitive, like Intel's "forcing out" of Brian Krzanich as CEO for, uh, you know, with a female subordinate in 2018, but mostly, IMO, BoDs are just for-show oversight. It is alarming, to say the least.

An incompetent board is dangerous to the society and the shareholders.

Abbott's infant formula scandal and the baby deaths it caused is a sad example. Now it's leading to a nationwide infant formula shortage.



And Abbott is facing questions about their decision to buy $5 billion stock back to boost stock price instead of spending money to fix Michigan plant problems before infants got killed.


Boeing's board is another sad example. And they do kill!
 
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Agreed, and if only this was just an Intel problem. IMO, unqualified board members are a significant problem of many (perhaps most) US companies. Take a look at the Applied Materials BoD, for another example. The boards hire people with impressive-looking resumes from various fields, not experts in what the company does. Some board members are, justifiably, experts in corporate finance, government matters (companies like Apple with global anti-trust problems come to mind), customer / market matters, etc, but in the US most BoDs simply won't be qualified to judge strategy or technical direction. And I don't think the CEOs or board chairpersons are looking for technical activists as board members. The BoD membership is mostly for show, IMO. Sometimes they are called upon to vote on something sensitive, like Intel's "forcing out" of Brian Krzanich as CEO for, uh, you know, with a female subordinate in 2018, but mostly, IMO, BoDs are just for-show oversight. It is alarming, to say the least.

You can't say that Taiwanese companies are any different, most would seek a quiet board with impressive resumes to pageant in front of big institutional funds.


A committee at the helm of the company is generally not what you want in a semi space, or any technical space. The whole concept of a public company is very unfriendly to technical development. By default, having a single helmsman enables a company to pursue something one person's unique expertise, and having many talking heads dilutes this.

Taiwan used to have quite activist regulators around a decade ago, demanding tons of scrap paper in form of reports from public companies about very nebulous things "CSR reports," "IP strategy," "corporate governance plan disclosure," "supply chain resilience assessment" can't remember exact names in English. Nothing good came out of that, it was toned town, but effects remained.

Board stuffing with randoms with stategiser background to appease Taiwan financial supervision commission is from that time.
 
Interesting comparison. Of course stock based compensation will take a big hit this year. Where are Lisa Su, Jensen Huang, and CC Wei on the comparison?

CEO Pay 2022.jpg
 
Interesting comparison. Of course stock based compensation will take a big hit this year. Where are Lisa Su, Jensen Huang, and CC Wei on the comparison?

View attachment 749

I will tell about people about whom I can understand.

1. Tim Cook — I can say this is a person whom would've been running a sourcing office of an average brand 15 years ago.

I remember my first job in 2007-2009, and people coming from abroad to buy widgets at least knew from what kind of factory each widget was coming from. Now, a more regular picture is a delegation of 3-4 men, a lawyer, an supply chain manager, and some "China consultant" arriving, and arguing in with each other for an hour from whom to buy an aluminium laptop lid, just to find that all suppliers they shortlisted were plastic moulding factories.

A really helpful type of person to get things done, but I as you see I don't get why he gets idolised to this extend.

I think he is a case of just plainly competent guy who also happened to live long enough to learn how to survive an American boardroom, and shareholder meetings.

2. Nadella — Actual software engineer who sat at the job for long enough to get promoted.

Microsoft has reached a Catharsis, where it was a really unappealing place to work for trendy boys, and when they all left, people finally started to realise that there is really nobody left to put into the boardroom. As rumours tell, Microsoft C-level jobs were offered to a really wide selection of people, who all refused very lucrative terms.

For now, Microsoft shareholders see hims as a Jesus the Saviour figure who made some unfathomable magic, and keep quiet. In reality, what Nadella did was just to sell Azure to Active Directory buyers, since the later will buy just anything anyways.


3. Tan — Concrete plant operator.

As the title suggest, works, and sees electronics as commodity stuff, and thinks that the foolproof recipe for happiness is to buy all competing concrete plants, and steel mills in a country.

4. Su — more of a Nadella type too

Another case of somebody who actually knows what's happening getting the job just through growing in seniority, and waiting.

5. Huang — well, a really good combo of somebody growing up, and learning tricks of surviving the boardroom, pleasing investors, lawfare, playing Steve Jobs, while also being a technical person.

While Nvidia is a public company now, he never stopped treating is as his own shop, and it helps.

6. Wei — used to be more salesmanly type, but then had to learn the tech, and become even better at handling big clients.
 
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I will tell about people about whom I can understand.

1. Tim Cook — I can say this is a person whom would've been running a sourcing office of an average brand 15 years ago.

I remember my first job in 2007-2009, and people coming from abroad to buy widgets at least knew from what kind of factory each widget was coming from. Now, a more regular picture is a delegation of 3-4 men, a lawyer, an supply chain manager, and some "China consultant" arriving, and arguing in with each other for an hour from whom to buy an aluminium laptop lid, just to find that all suppliers they shortlisted were plastic moulding factories.

A really helpful type of person to get things done, but I as you see I don't get why he gets idolised to this extend.

I think he is a case of just plainly competent guy who also happened to live long enough to learn how to survive an American boardroom, and shareholder meetings.

2. Nadella — Actual software engineer who sat at the job for long enough to get promoted.

Microsoft has reached a Catharsis, where it was a really unappealing place to work for trendy boys, and when they all left, people finally started to realise that there is really nobody left to put into the boardroom. As rumours tell, Microsoft C-level jobs were offered to a really wide selection of people, who all refused very lucrative terms.

For now, Microsoft shareholders see hims as a Jesus the Saviour figure who made some unfathomable magic, and keep quiet. In reality, what Nadella did was just to sell Azure to Active Directory buyers, since the later will buy just anything anyways.


3. Tan — Concrete plant operator.

As the title suggest, works, and sees electronics as commodity stuff, and thinks that the foolproof recipe for happiness is to buy all competing concrete plants, and steel mills in a country.

4. Su — more of a Nadella type too

Another case of somebody who actually knows what's happening getting the job just through growing in seniority, and waiting.

5. Huang — well, a really good combo of somebody growing up, and learning tricks of surviving the boardroom, pleasing investors, lawfare, playing Steve Jobs, while also being a technical person.

While Nvidia is a public company now, he never stopped treating is as his own shop, and it helps.

6. Wei — used to be more salesmanly type, but then had to learn the tech, and become even better at handling big clients.
You might be right, but MSFT + AAPL > US$4T in market capitalization, even at their currently reduced levels, which is greater than the value of the entire London Stock Exchange. I should be so incompetent. ;-)

I like Huang too.
 
You might be right, but MSFT + AAPL > US$4T in market capitalization, even at their currently reduced levels, which is greater than the value of the entire London Stock Exchange. I should be so incompetent. ;-)

I like Huang too.

Plainly incompetent people get into important places all the time, and there is nothing unnatural about this. Institutional negative selection is a very real thing.

When GWB got the presidency, every pundit was putting theories of him being some "superintelligent evil genius" who just pretends to be dumb as a part of some unfathomable scheme, since you cannot come from a such sophisticated power family, and be a dumbo. In the end, he proved to be exactly whom he appeared to be.

In German, there is a phrase "to outsmart yourself" — to try doing something so smart, and complicated so hard that you end up screwing up because you push way beyond ones capability. What comes in the end can truly be something complicated, and smart, but non-working.

Similarly, people who take selection decisions for high value businesses are frequently ending up betting on people whom they perceive as such — "he climbed so high, he can't possibly be dumb!" And that squeezing last money from 5 years old dies must be some really good strategy, which we mortals simply can't understand.
 
While I loved, loved Paul2 cold shower on leaders above, but there must be good leaders out there, value creators, worth what they were paid? They tend to come from the lower region of the S-curve. My candidates:
1-Morris Chang. I keep posting the Brookings Institution podcast he did recently, it is so good to listen to, repeatedly. There is something irreplaceable about being near the founding of a new technology, like he was at TI in the 1960s, following Kilby and the transistor's ascent. His experience of the smarts in industry chasing compensation into finance/consulting is a warning, and an explanation for the cold shower above.
2-Bill Gates.
3-Steve Jobs.
4-Bob Noyce.

As you can see from my list, we're living in the twilight period now, on the top of the S-curve, with stewards rather than leaders.
 
I will tell about people about whom I can understand.

1. Tim Cook — I can say this is a person whom would've been running a sourcing office of an average brand 15 years ago.

I remember my first job in 2007-2009, and people coming from abroad to buy widgets at least knew from what kind of factory each widget was coming from. Now, a more regular picture is a delegation of 3-4 men, a lawyer, an supply chain manager, and some "China consultant" arriving, and arguing in with each other for an hour from whom to buy an aluminium laptop lid, just to find that all suppliers they shortlisted were plastic moulding factories.

A really helpful type of person to get things done, but I as you see I don't get why he gets idolised to this extend.

I think he is a case of just plainly competent guy who also happened to live long enough to learn how to survive an American boardroom, and shareholder meetings.

2. Nadella — Actual software engineer who sat at the job for long enough to get promoted.

Microsoft has reached a Catharsis, where it was a really unappealing place to work for trendy boys, and when they all left, people finally started to realise that there is really nobody left to put into the boardroom. As rumours tell, Microsoft C-level jobs were offered to a really wide selection of people, who all refused very lucrative terms.

For now, Microsoft shareholders see hims as a Jesus the Saviour figure who made some unfathomable magic, and keep quiet. In reality, what Nadella did was just to sell Azure to Active Directory buyers, since the later will buy just anything anyways.


3. Tan — Concrete plant operator.

As the title suggest, works, and sees electronics as commodity stuff, and thinks that the foolproof recipe for happiness is to buy all competing concrete plants, and steel mills in a country.

4. Su — more of a Nadella type too

Another case of somebody who actually knows what's happening getting the job just through growing in seniority, and waiting.

5. Huang — well, a really good combo of somebody growing up, and learning tricks of surviving the boardroom, pleasing investors, lawfare, playing Steve Jobs, while also being a technical person.

While Nvidia is a public company now, he never stopped treating is as his own shop, and it helps.

6. Wei — used to be more salesmanly type, but then had to learn the tech, and become even better at handling big clients.
Just out of curiosity, how many of the people on your list have you personally seen in action?
 
While I loved, loved Paul2 cold shower on leaders above, but there must be good leaders out there, value creators, worth what they were paid? They tend to come from the lower region of the S-curve. My candidates:
1-Morris Chang. I keep posting the Brookings Institution podcast he did recently, it is so good to listen to, repeatedly. There is something irreplaceable about being near the founding of a new technology, like he was at TI in the 1960s, following Kilby and the transistor's ascent. His experience of the smarts in industry chasing compensation into finance/consulting is a warning, and an explanation for the cold shower above.
2-Bill Gates.
3-Steve Jobs.
4-Bob Noyce.

As you can see from my list, we're living in the twilight period now, on the top of the S-curve, with stewards rather than leaders.

The key word here is value.

Technical skill — I would say there are 100 genius level VLSI designers on the market, some work for day jobs, and they are not hard to find at all.
Sales people — thousands of people to choose from to drive semi sales on all levels. While sales is always hit, or miss, there is no general problem of finding once in a lifetime match. Sales people are also very, very poachable.
Operations manager — hardest to replace actually, you look for very specific experience from everybody

So, in general there is no existential crisis getting staff just to run, and do what you do for almost any company. 7 digit remuneration will get you just any professional of important role.

What's not so common is UNIQUE experiences. Things which really only one man in the world has in his mind. Or only one man in the world has understood out of hundreds.


Huang Jensen is one in the million case of a really good engineer knowing all other things expected of a C-level of a big American company which can only be learned by experience for example. Being a good engineer, and being good playing big institutional investors, for example, is already rare enough to be counted in single digits globally. The count here is simple: get F500, ctrl+f "Eng. PhD" on the resume list, ctrl+f "actively practicing," "ctrl+f" good record with investors, and you will get a list of 20 people.



Same with TSMC: how many people out there know how to grow a global tier 1 foundry? Only ones are all in TSMC. Losing Wei will shorten the hiring list for TSMC to zero. Anybody new on the job will have to know what it takes to have a dead grip on Apple+AMD+Qualcomm+Broadcomm — a thing impossible to learn unless actively coached by a predecessor. And this in addition just to general knowledge of how to run a foundry business as such (which is again, close to 20 men globally)
 
Just out of curiosity, how many of the people on your list have you personally seen in action?

Through being in, and out in Shenzhen non-stop since my first job in 200x, I think I knew people who were 1-2 handshakes away from C-levels of all companies in the list. Workings of Apple is more or less transparent to me, as is to hundreds of companies who worked on making parts/components/modules/subassemblies for Iphones. Me, and my coworkers, and ex-coworkers I know worked for like half of all electronics brands you would see in an American supermarket.


The world of electronics manufacturing is a surprisingly small. We engineers keep bumping into each others for decades. Ex-Sugon engineers for example, some counted, worked for nearly all foreign companies with presence in China.
 
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While I loved, loved Paul2 cold shower on leaders above, but there must be good leaders out there, value creators, worth what they were paid? They tend to come from the lower region of the S-curve. My candidates:
1-Morris Chang. I keep posting the Brookings Institution podcast he did recently, it is so good to listen to, repeatedly. There is something irreplaceable about being near the founding of a new technology, like he was at TI in the 1960s, following Kilby and the transistor's ascent. His experience of the smarts in industry chasing compensation into finance/consulting is a warning, and an explanation for the cold shower above.
2-Bill Gates.
3-Steve Jobs.
4-Bob Noyce.

As you can see from my list, we're living in the twilight period now, on the top of the S-curve, with stewards rather than leaders.
Here's my biased take:

Bill Gates is a useless sicko whose reign (along with his boy Ballmer) did more harm than good for technology as a facet of human development. And he knows this, hence the overreach of his "foundation" today.

Jobs was a visionary with a dash of tyrannically crunchy Randianism, epitomized by his response to low mortality pancreatic cancer: "no thanks bro, I'm all set, I've got cucumbers on my eyes".

Noyce seems the most outstanding of the bunch, although Intel was and is slaughterhouse of engineers clamoring over one another, which inevitably devolves into obscene politics and stagnation at the hands of the ones who can manage the climb, as is evidenced today.
 
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