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Intel Governance and Compensation April 2009

 

Corporate Governance Update Board independence measures - separate chair and CEO roles, majority independent directors, independent board committees Transparency - corporate governance guidelines and committee charters published on website and long history of public voluntary reporting on corporate governance (annual CSR report) Majority vote - amended bylaws in 2006 to adopt majority-vote standard (recognized as "gold standard" in corporate governance) "Say on pay" - responded proactively and voluntarily to shareholder requests for stronger voice in executive pay in 2009.

 

Corporate Governance Ratings IR Global Rankings -Top Ranked Corporate Governance Practices (March 2009) CRO's 100 Best Corporate Citizens - including #1 ranking in corporate governance category (February 2009) Technology Market Supersector Leader by Dow Jones Sustainability Indexes for 8th year running (September 2008) Named to Global 100 Most Sustainable Companies announced at World Economic Forum 5 yrs running (January 2009) Covalence Ethical Rating 2008- Rated #2 overall and #1 in our sector (January 2009)

 

Steadily Increasing Dividend Dividends Dividends: $15B returned to stockholders 5 years of increasing dividends CAGR = 47% Dividend Yield = 3.7%^ ^ represents $15.03 Intel stock price close on 4/1/2009 Source: Intel

 

Stock Repurchases and Dilution Repurchases: Return cash to stockholders Exercises as % of shares out 5 year average = 1.1% 13 year average = 1.2% Shares Repurchased Shares Exercised M Shares Source: Intel

 

6 Buyback History in Dollars Source: Intel

 

Options Exchange Program

 

Intel's Options Exchange Proposal Value neutral and cost neutral exchange of employee stock options Results in substantially fewer shares offered each participating employee P&L expense already realized so no added cost impacts Excludes named executives and Board of Directors Surrendered options are cancelled completely Significant reduction in overhang Options plans put to proxy bi-annually for stockholders to monitor and vote on Only long-term out-of-the-money options are eligible

 

Key Reasons for Options Exchange Options remain a key element of our compensation philosophy All other forms of compensation frozen across the board in effort to reduce costs and preserve cash No raises or promotions Significant cuts to defined benefit plans and employee stock participation plan Opportunity to make equity plan have renewed meaning to employees-at no cost-at a time when significant cutbacks taking place Equity compensation better aligns employee motivation and action with long-term stockholder interests Retention: market for top talent remains robust New issued options would vest over 4 years renewing retention aspect of equity plan