Intel Corp., the world’s largest computer chipmaker, Thursday said Chief Executive Craig Barrett plans to step aside and be replaced by President Paul Otellini, in a long-planned move.
In a statement, the company said Barrett, 65, will take over as chairman, replacing Andy Grove, the company’s previous CEO, all as part of a previously telegraphed succession plan.
The changes are to become effective at the next annual meeting, scheduled for May 18.
Grove, 68, will no longer serve on the Intel board but will assume the role of senior adviser to the board and senior management, the company said.
Barrett, who joined Intel in 1974, is credited with building Intel into the high-tech industry’s unparalleled manufacturing powerhouse.
Barrett, a former Stanford University college professor turned Intel executive, was known for formulating Intel’s “Copy Exactly” strategy, meaning every chip-making plant is a mirror reflection of every other one.
He also spearheaded Intel’s ventures down less successful roads, particularly Web hosting as well as an expensive and, to date, money-losing push into communications chips, where the company has spent billions of dollars on acquisitions.
Company raises dividend
Separately, Intel said Wednesday it would double its quarterly dividend to 8 cents a share, the second time this year it has doubled its cash payout.
Intel also said its board had authorized the repurchase of an additional 500 million shares of common stock, worth about $11.4 billion at current prices. So far this year, Intel has repurchased more than 263 million shares at a cost of $6.6 billion.
The new quarterly dividend will be paid on March 1 to shareholders of record as of Feb. 7, Intel said. The increase brings Intel's annual dividend to 32 cents a share, a yield of about 1.4 percent based on the current stock price.
While that yield gives Intel one of the most generous dividend policies among technology companies, the company's $16 billion cash holdings allow for a higher payout over time, said Marshall Front, chairman of Chicago-based Front Barnett Associates, which manages about 2 million Intel shares.
"There's plenty of room for Intel to raise their dividend and still have sufficient cash flow to fund their research and development," Front said.
An increasing number of technology companies have started or increased cash dividends, which historically have been a mainstay of "old economy" industries such as utilities.
Intel last increased its dividend in January, when the board of the Santa Clara, California-based company approved a rise in the quarterly payout to 4 cents a share from 2 cents.
