Intel CEO Brian Krzanich has resigned and is also relinquishing his position on the company's Board of Directors. His successor will temporarily be Robert Swan, the current Chief Financial Officer. The chip manufacturer announced on Thursday that Krzanich had violated Intel's code of conduct, which forbids managers to have relations with subordinates. Krzanich will be replaced by Swan with immediate effect. The company did not disclose whether Krzanich's relationship with an Intel employee was a woman or a man.
Krzanich's immediate resignation would show "that all employees will respect Intel's values and adhere to the company's code of conduct," said Intel. In many US companies, managers are forbidden to enter into relationships with employees because, among other things, it is feared that they could take advantage of their executive role.
The Supervisory Board has "established a robust succession planning process and has begun the search for a permanent CEO who includes both internal and external candidates".
Krzanich was an Intel manager for decades and has held the position of CEO since May 2013. He joined the company in 1982. Intel removed his biography from his website this morning. He is married with two children and lives in Atherton, a small town in San Mateo County with about 7000 inhabitants. The city is located near Silicon Valley and is one of the richest in the US, with the highest property prices in the country.
Last year Krzanich and Intel were criticized for their response to the major security holes known as Meltdown and Spectre. The catastrophic situation triggered a coordinated response in the provision of patches and firmware fixes throughout the computer industry. But some of the updates proved to be buggy. Last November, Krzanich sold Intel shares worth around 39 million dollars - after the company was informed about the far-reaching Spectre problem. This raised the suspicion of insider trading that, according to Intel, the sale of shares had nothing to do with Spectre.
Krzanich had the task of developing Intel beyond the sluggish PC market after decades of working in the field of chip manufacturing. His goal was to "move Intel from a PC company to a company that operates the cloud and billions of intelligent, networked computers.
Intel stated that it would continue to adhere to this strategy: "The Board firmly believes in Intel's strategy," said Andy Bryant, Chairman of the Supervisory Board of Intel. Commenting on the CFO and new interim CEO, Byant said, "Bob has been instrumental in developing and implementing Intel's strategy and we know that the company will continue to function smoothly.
Despite the turbulence surrounding the former CEO, business is going well. Intel raised its forecast for the current second quarter this afternoon. Sales are expected to be 16.9 billion dollars and earnings per share 99 cents. Analysts had previously assumed sales of $16.29 billion and earnings per share of 85 cents. 2018 will be another record year. Krzanich's resignation nevertheless weighed on the shares at the opening of trading. They lost over one percent.