Intel CEO to retire early, company searches for successor
Intel Corp's Chief Executive Officer Paul Otellini will retire sooner than expected and the top chipmaker said it may name an outsider for the position for the first time to steer a difficult transition toward mobile computing.
Intel, which has selected chief executives from within its own ranks throughout its 45-year history, said it would consider both internal and external candidates in a transition expected to last six months.Otellini will retire in May at the age of 62, earlier than the company's mandatory retirement age for CEOs of 65. Intel's fifth chief executive, Otellini has worked at the company for nearly 40 years and became CEO in 2005.
Intel's board was surprised last week when Otellini announced he planned to retire and it tried to get Otellini to stay, Intel spokesman Chuck Mulloy said.Some Wall Street analysts said it might make sense for Intel to consider hiring an outsider to shake up its strategy as the computing world goes through its most significant shift since the advent of the Internet.
But internal candidates will have a leg up over potential outside contenders because of Intel's size, complexity and engineer-driven culture, Mulloy said.
For any company of the size and complexity of Intel, an internal candidate would have a natural advantage, he said. However, Mulloy added: Good corporate governance dictates today you should look inside and out.Intel, whose processors are dominant in personal computers, has been slow to expand into the fast-growing mobile industry, where Apple Inc's iPads and iPhones and other popular mobile devices use competing technology from Britain's ARM Holdings Plc. We all know that everyone is using smartphones and tablets now. It's the era of Intel versus ARM, so it may be good to come in with some fresh blood and a new perspective, Evercore analyst Patrick Wang said.
Intel said it was promoting three executives to become executive vice presidents: Renee James, who is in charge of Intel software; Brian Krzanich, who is chief operating officer and oversees manufacturing; and Stacy Smith, chief financial officer and director of corporate strategy.Smith, well-known by Wall Street, and Krzanich have in the past been viewed as potential CEOs. There is a comfort level with Stacy (Smith), said Williams Financial analyst Cody Acree.
Krzanich, a three-decade Intel veteran, made a name for himself improving the efficiency of the chipmaker's cutting-edge factories. He was promoted to chief operating officer last March, effectively throwing him in the running for the post of CEO.Analysts said James' focus on software instead of hardware made her less likely to be promoted to CEO.
Bryant pointed to Krzanich, Smith and James, as well as Intel Capital head Arvind Sodhani and Dadi Perlmutter, head of Intel's push into mobile, as important executives for Intel's future, according to Barron's.