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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Saturn V who wrote (180523)	3/30/2005 5:06:09 AM
From: Amy J	Read Replies (2) \| Respond to of 186894

Saturn, you write a very balanced post. But the part about the bonus is very compartmentalized to the point that a hypothetical disaster in #6 that could take down a company would not get properly reflected as a negative in the bonus, using this approach. Hypothetically, if #6 is so bad, it could take #1 thru #3 down at a future date (say after a hypothetical vendor switch due to #6.) Meanwhile, a compartmentalized methodology would yield a great bonus score. If a stumble can negatively impact future financials, where is that in the bonus score? RE: "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" The first metric is company performance - it's a leading indicator for financial performance. Stumbles are serious business, as you also suggested. Not only was Intel's stumble bad for it financially (yes, financially, because if the stumble had not happened, the financials would have been even better), but it led to a negative phase for that part of the year. The fact that Barrett cleaned it up should reflect positively in the financials this year. This is where the option reward should reward him. He certainly did clean it up. But the compartmentalized approach you suggest for a bonus shouldn't be used to reward a stumble, by my book. Maybe I'm too harsh. But the phrase "based upon financial metrics 2004 was one of Intel's best years" rings hollow to Intel's customers - it's not the best way to describe a year with a stumble that ticked Dell off. There needs to be sensitivity to this. (On the positive, at a restaurant I overheard what sounded like an Intel sales pitch and it gave me the impression Intel is much more sensitive to customers. This person was definitely sucking up to customers.) If the Q1 report is strong as a result of Barrett cleaning this up, then the phrase you used to describe performance could be very appropriate to use then, because it would acknowledge they've cleaned things up and we'd all be happy. But it's not the best phrase to describe last year's company performance. I agree with the other aspects of your post on the prior years. There's a lot of strategic stuff that I think people never give Barrett credit for, for example you accurately pointed out the protection Intel gained from their low-end and high-end strategy. Additionally, Barrett got the company past "only a PC desktop company." Regards, Amy J