Due to the underperformance of its foundry business, Intel shareholder LR Trust has expressed deep dissatisfaction and decided to hold executives and directors accountable. The shareholder is demanding the return of three years' salary, along with punitive damages.

Demand for Compensation Return and Damages

Shareholder LR Trust has filed a lawsuit accusing Intel's former CEO Pat Gelsinger and the current interim co-CEO and CFO David Zinsner of mismanagement. The shareholder is demanding the return of their compensation, along with damages.

LR Trust has accused Intel's Foundry Services (IFS) of subpar performance, alleging that Gelsinger and Zinsner failed to truthfully disclose IFS's struggles in attracting customers and sustaining losses. They issued materially false and misleading public statements regarding cost savings, operational efficiency, and IFS profitability.

The lawsuit further alleges that Gelsinger and Zinsner received substantial compensation during their tenure, including salaries, stock awards, and bonuses.

The plaintiffs are demanding that Gelsinger return the $207 million (approximately RMB 1.511 billion) in compensation he earned during his tenure from 2021 to 2023 and compensate Intel for the losses incurred as a result.

Severe Losses in Intel's Foundry Business

In 2023, Intel's manufacturing division incurred losses of up to $7 billion, and these losses are expected to intensify in 2024 due to increased investment in new manufacturing plants.

Should the lawsuit prove successful, the compensation will be paid directly to Intel, rather than to LR Trust or individual shareholders, potentially significantly improving the company's financial situation.

Significant Drop in Intel's Share Price and Market Value

Since Gelsinger took office in February 2021, Intel's share price has plummeted from approximately $60 to $65 to $30 to $35, marking a decline of roughly 50%.

The company's market value has also decreased by $100 billion to $120 billion, equivalent to a drop of approximately 42% to 50%.

This lawsuit not only poses a challenge to Gelsinger's personal career but also serves as a direct reflection of Intel's difficulties within its foundry business.