Director Compensation
Director Compensation
The general policy of the Board is that compensation for independent directors should be a mix of cash and equity-based compensation. Intel does not pay management directors for Board service in addition to their regular employee compensation. The Corporate Governance and Nominating Committee, which consists solely of independent directors, has the primary responsibility for reviewing and considering any revisions to director compensation. The Board reviews the committee's recommendations and determines the amount of director compensation.
Intel's Legal department, Corporate Secretary, and Compensation and Benefits Group in the Human Resources department support the committee in setting director compensation and creating director compensation programs. In addition, the committee can engage the services of outside advisers, experts, and others to assist the committee. During 2007, the committee did not use an outside adviser to aid in setting director compensation.
To assist the committee in its annual review of director compensation, Intel's Compensation and Benefits Group provides director compensation data compiled from the annual reports and proxy statements of companies that the Board uses as its "peer group" for determining director compensation. The director peer group consists of companies within the S&P 100 and technology companies generally considered comparable to Intel. The committee targets cash and equity compensation at the median of the peer group. The director peer group consists of the following companies:
| Company | Reported Fiscal Year |
Revenue (in billions) ($) |
Net Income (in billions) ($) |
Market Capitalization on February 20, 2008 (in billions) ($) |
||||
|---|---|---|---|---|---|---|---|---|
| American International Group Inc. | 12/31/07 | 110.1 | 6.2 | 121.5 | ||||
| Bank of America Corporation | 12/31/07 | 66.3 | 15.0 | 190.9 | ||||
| Chevron Corporation | 12/31/07 | 220.9 | 18.7 | 180.3 | ||||
| Cisco Systems Inc. | 7/28/07 | 34.9 | 7.3 | 139.4 | ||||
| Dell Inc. | 2/2/07 | 57.4 | 2.6 | 44.3 | ||||
| Hewlett-Packard Company | 10/31/07 | 104.3 | 7.3 | 122.1 | ||||
| International Business Machines Corporation | 12/31/07 | 98.8 | 10.4 | 149.9 | ||||
| Johnson & Johnson | 12/30/07 | 61.1 | 10.6 | 182.7 | ||||
| JP Morgan Chase & Co. | 12/31/07 | 71.4 | 15.4 | 145.3 | ||||
| Microsoft Corporation | 6/30/07 | 51.1 | 14.1 | 262.6 | ||||
| Motorola, Inc. | 12/31/07 | 36.6 | — | 26.1 | ||||
| The Proctor and Gamble Company | 6/30/07 | 76.5 | 10.3 | 203.6 | ||||
| Texas Instruments Incorporated | 12/31/07 | 13.8 | 2.7 | 40.7 | ||||
| Wal-Mart Stores, Inc. | 1/31/07 | 345.0 | 11.3 | 199.0 | ||||
| Intel 2007 | 12/29/07 | 38.3 | 7.0 | 119.0 | ||||
| Intel 2007 Percentile Rank | 16th | 23rd | 23rd |
After reviewing peer group director compensation data in 2007, the committee did not recommend any changes to director compensation, as the current level of compensation was deemed competitive. The Board followed the recommendation of the committee and determined that no changes would be made to non-employee director compensation in 2007. Non-employee director compensation consists of the following elements:
- annual cash retainer of $75,000
- annual restricted stock unit (RSU) grant with a market value of approximately $145,000
- Audit Committee chair annual fee of $20,000
- all other committee chair annual fees of $10,000
- non-chair Audit Committee member annual fee of $10,000
- Lead Independent Director annual RSU grant with a market value of approximately $30,000