SANTA CLARA, CA: Intel is strengthening its commitment to corporate governance in an effort to dissuade shareholders from urging the company to begin expensing options.
In recent proxy materials issued by the company, Intel revealed guidelines that include outlining the separation of the chairman and CEO jobs, limiting stock options for executives, and tightening conflict-of-interest controls for directors.
Company spokesman Bill Calder said these actions are nothing new, but putting them in writing demonstrates Intel's commitment.
"We've been doing this stuff for years," said Calder. "We have independent board members. For a brief period, we had one person as both the CEO and chairman. But those have been separate roles for a while. These are things we have always done, but now they've been formally adopted."
A shareholder resolution, being pushed by the United Brotherhood of Carpenters and Joiners of America Pension Fund, is pushing the company to expense options. Shareholders will vote on the resolution May 21.
"We want to help our shareholders understand how we are running things," said Calder. "This rush to expense options is a popular reaction to excessive corporate greed that we've seen at other companies over the last year or so. But expensing options doesn't address the real problem of excessive compensation. If we had been expensing options, using the current method, we would have incurred costs of $3 billion for shares that may never be exercised. How does that give investors any clarity?"
Intel's long-standing corporate-governance practices, now committed to in writing, will hopefully demonstrate that the company is well run, and that the shareholders' push for expensing options isn't necessary, Calder added.