Intel Shares Lower After CEO Quits Over ‘Past Consensual Relationship'

Intel shares closed 2.4 percent lower Thursday at $52.19 after the announcement that Brian Krzanich resigned as CEO because of a “past consensual relationship” with an unnamed Intel employee that violated the company’s “non-fraternization policy.” Chief Financial Officer Robert Swan will be interim CEO until a permanent chief is hired either from inside or outside Intel, said the company. Krzanich hosted his fifth annual shareholder meeting as CEO May 17, giving himself high grades on his self-described five-year “report card.” Intel drew two-thirds of its revenue from PCs when he became CEO in 2013, but Krzanich successfully supervised the company’s transformation to a “data-centric” model, he told shareholders. Under his watch, Intel turned from a “flat revenue profile” at the beginning of his term into a company with a 4.5 percent compound annual growth rate in sales, he said. A November SEC filing shows Krzanich bought and sold 644,000 shares of Intel stock by exercising his options and sold an additional 246,000 shares that he already owned. At the meeting, a shareholder asked Krzanich whether his “recent stock sell” reflected his confidence in Intel's future. “I can say absolutely the sale is not a reflection at all of my confidence in the company,” he responded. “My view of the company is stronger today than it ever has been in my 35 years here.” Krzanich used the CES keynote stage to announce a “diversity initiative” that would make the Intel workforce mirror the demographic makeup of the U.S. population, tweeted CTA President Gary Shapiro Thursday. “Intel is almost there. He is a visionary and great leader despite his reason for leaving.” Krzanich's departure raises the possibility that Intel could celebrate its 50th birthday July 18 without a permanent CEO. "I want to give you a quick kind of sneak that I encourage you to look to the skies above our headquarters here in Santa Clara," so that shareholders can "celebrate with us as our anniversary approaches that week," he told the annual meeting.