Intel chief executive Paul Otellini’s part-time job paid off handsomely again last month.
In his spare time away from running the world’s largest semiconductor manufacturer, Otellini serves on the board of directors for Google, a company whose market value has overtaken Intel’s since his time on its board.
Google’s board members don’t receive any cash compensation for their service. Instead they are paid in something that, so far, has proved far more valuable than U.S. dollars (which isn’t so hard these days). They are paid in Google stock.
When Otellini first joined Google’s board in April 2004, months before its initial public offering, he was granted an option to buy 65,000 shares of its stock at $35 a share, or $2.28 million. Google shares were first offered to the public through an auction process that priced them at $85 before they first began trading in August 2004.
Otellini sold 23,833 shares of Google from Nov. 16 to Nov. 20 at an average per-share price of $638.15, giving him a profit of more than $600 per share. He sold 21,666 shares in 2006 at an average price of about $400 per share. His total profit on his Google options so far: $22.3 million.
In his first year on the board, Otellini served on its audit committee. For the last two years has served on its leadership development and compensation committee.
From 2004 through 2006, Google’s board has met 27 times, including 14 meetings in 2004, some of which were no doubt held prior to Otellini’s becoming a member. Meetings of the committees on which he has served number 12 during that time. The board and committees also acted 9 times via written consent rather than in person, making for a maximum of 48 board-related events for Otellini since 2004.
That works out to compensation of about $464,000 per Google board event. Nice work, if you can get it.
Compare that with his full-time employment at Intel, where he also receives salary and bonus. Over the the last 16 years he has netted some $102 million exercising and selling about 5.2 million Intel shares of Intel, according to Thomson Financial.