Intel’s CEO resigns
Intel (INTC) management was shaken up yesterday after the chipmaker announced the immediate resignation of Brian Krzanich, CEO and member of the board of directors. Krzanich joined the company in 1982 as an engineer and became its CEO in May 2013.
His exit came as a surprise to the market, which was reflected in the stock. INTC stock fell 1.5% yesterday when the news broke, and it ended the day down 2.4% at $52.19.
Krzanich violated Intel’s policies
Intel’s announcement of Krzanich’s resignation came after an investigation by internal and external counsel that revealed that he had violated Intel’s non-fraternization policy with his past relationship with an Intel employee. According to the company’s policies, managers can’t have any relationships with staff who report to them directly or indirectly. A similar event happened in May 2018 when the co-founder of Guess (GES), Paul Marciano, stepped down following allegations of sexual harassment and assault.
Intel has started looking for a new CEO and has appointed its chief financial officer, Robert Swan, as interim CEO.
Under Krzanich’s guidance, Intel had been transforming from a PC-centric to a data-centric company. Krzanich’s efforts in this transformation helped Intel get back to earnings growth. Intel stock has grown 120% since Krzanich became the CEO. The stock has risen 50.9% in the trailing 12-month period.
Also, ongoing trade tensions between the United States and China are hitting semiconductor stocks. Intel has fallen 6% in the trailing five-day period. Intel’s peers Advanced Micro Devices (AMD), Nvidia (NVDA), and Qualcomm (QCOM) have fallen 3.7%, 3.7%, and 1.2%, respectively, in the trailing five-day period. The Dow Jones had its eighth straight daily decline.