Amy,
The financial metrics used for bonuses have to be simple. The most used metrics are
1. Profit and profitability 2. Revenue 3. ROI
However long strategic indicators which are non-financial should also be included. These should include:
4. Market share in segment. 5. A Metric to measure quality of the company products 6. Execution of Development Milestones
Based upon 1. 2. Intel was close to record values. Milestone 3. and 4 were OK. Milestone 5 for Quality Is a Unknown. Indicator 6 for Development was a problem based upon the highly publicised Prescot fumbles, but there may be other development milestones of projects which are not public. And the process development milestones were just fine because competitors have fumbled a lot on new process technology but Intel has had smooth sailing.
You or G V Tucker used to claim on this thread, that it was good for CEO compensation to be in a bonus to be tied mostly to financial performance and less to stock, since stock based compensation causes a CEO to swing for home runs only.
I am not a Barret apologist. In my opinion his biggest failing was a willy nilly buying of communication companies without any thought to strategy. A lot of companies did not leverage any of Intel's strengths and were poor fits. Most of these have been discarded, but the shareholders paid a price. Intel has lost market share in Flash due to two fumbles. Raising prices showed customer insensitivity and was a long term disaster. Furthermore Intel had too narrow a focus on high performance Flash at the expense of low cost Flash, and Intel lost share to Samsung and Sandisk. Another failing has been the lack of success in penetrating the cell phone DSP business.
However Intel has increased its domination of the computer industry. X86 has increased its share of computing. Technical Competitors like RISC, WebComputing, Java Machines have been weakened. Sun is limping at best, TransMeta, Cyrix( National), IDT have been eliminated. Itanium may not have met the financial expectations but has definitely covered any possible attacks from high end computing on Intels profits. Quietly Intel's XScale has made major inroads into low end computing and has become dominant for PDA and other low end computing devices. Intel is now synonomous with computing, as IBM was from 1950-1990. IBM faded because it failed to protect itself from the inroads made by low end computing technology on the x86 platform. Thus XSCALE and ITANIUM protect Intel from possible attacks from the High and Low end.
So during the Barret tenure he kept up Intel's profits and consolidated its position for the future. The foray into Future Growth Product Lines got ambushed by the Dotcom Bust and Communication Meltdown, and it remains a question mark. |
