Intel Taps Spencer Stuart to Find New CEO

December 5, 2024 – Spencer Stuart has been retained by Intel Corporation to lead in its search for a new CEO. Pat Gelsinger retired from the company after a distinguished 40-plus-year career and has stepped down from the board of directors, effective December 1, 2024. Intel has named two senior leaders, David Zinsner and Michelle Johnston Holthaus, as interim co-chief executive officers while the board of directors conducts a search for a new CEO. Mr. Zinsner is executive vice president and chief financial officer, and Ms. Holthaus has been appointed to the newly created position of CEO of Intel Products, a group that encompasses the company’s Client Computing Group (CCG), Data Center and AI Group (DCAI) and Network and Edge Group (NEX).

Frank Yeary, independent chair of the board of Intel, will become interim executive chair during the period of transition. The board has formed a search committee and will work diligently and expeditiously to find a permanent successor to Mr. Gelsinger, with the help of Spencer Stuart.

“As a board, we know first and foremost that we must put our product group at the center of all we do,” said Mr. Yeary. “Our customers demand this from us, and we will deliver for them. With MJ’s permanent elevation to CEO of Intel Products along with her interim co-CEO role of Intel, we are ensuring the product group will have the resources needed to deliver for our customers. Ultimately, returning to process leadership is central to product leadership, and we will remain focused on that mission while driving greater efficiency and improved profitability.”

Recent Struggles

Intel has been dealing with significant challenges, including a major restructuring effort to address financial and operational woes. Recent earnings reports showed disappointing results, with revenue missing expectations and a drop to $12.83 billion, down one percent year-over-year. Employee morale has taken a hit amid these upheavals. From 2020 to 2023, Intel’s revenue plunged to $54.2 billion from $77.9 billion. It posted a loss exceeding $16.5 billion last quarter alone, its biggest in history.

In addition, layoffs exceeding 15 percent (17,500 jobs) of the workforce have been paired with reduced benefits and the loss of traditional perks like sabbaticals and retirement celebrations. Intel has also scaled back real estate and office amenities, a move criticized as emblematic of its struggles.

But despite the cuts and business struggles, Intel remains core to the U.S. government’s goal of building up America’s capacity to make computer chips domestically and wean the nation off its reliance on manufacturing hubs in Taiwan, according to the Washington Post. Alvin Nguyen, a senior analyst at tech research firm Forrester, said Gelsinger’s exit may increase the likelihood that Intel spins off its foundry business. “It is something that investors have pushed for,” he said. But Mr. Nguyen also noted that Intel’s new government support for manufacturing could complicate such plans.

“Leading Intel has been the honor of my lifetime,” Mr. Gelsinger said in a statement Monday. “It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics.”

Privately held since 1956, Spencer Stuart focuses on delivering knowledge, insight, and results through the collaborative efforts of a team of search professionals — now spanning 56 offices, 30 countries, and more than 50 practice specialties. The firm helps boards and leaders address their leadership needs in areas such as senior-level executive search, board recruitment, board effectiveness, succession planning, in-depth senior management assessment and many other facets of organizational effectiveness.

Insider or Outsider?

The 56-year old American chipmaker will be breaking from its traditional internal promotion strategy, with sources indicating that the organization is seriously considering outside talent to lead the struggling company. Historically, Intel has hired from within, however, many think the company is considering hiring an external candidate. Mr. Gelsinger’s predecessor Bob Swan was Intel’s first true outside hire. The shortlist of candidates could not be fully learned, but Bloomberg citing people familiar with the matter reported that Marvell CEO Matt Murphy was among those being considered.

Recruiters focused on finding talent for the C-suite say that at least half of all job openings are filled by internal candidates before the positions are introduced to the public job market. This may suggest that companies have relatively reliable bench strength even though leadership development is seen as stagnating at many companies. The main reason given: Companies prefer to promote from within.

Related: Spencer Stuart Recruits President for the National Outdoor Leadership School

For those searches that go to recruiters, with a clear mandate to look wide and deep both inside and outside a client organization, internal candidates still surface more often and get the job about 80 percent of the time.

The Philadelphia Fed Taps Spencer Stuart to Find New President and CEO

Federal Reserve Bank president searches are some of the most coveted assignments to take on among executive recruiters, and a number of leading search firms have gotten in on the action. The Philadelphia Fed recently retained Spencer Stuart to lead in its search for a new president and CEO to succeed Patrick T. Harker.

A committee composed of eligible members of the Philadelphia Fed’s board of directors has been formed to conduct the search, consistent with Federal Reserve policies and the Federal Reserve Act. By law, only directors not affiliated with regulated banks or financial institutions are eligible to help select a Federal Reserve Bank president. The choice must be approved by the Federal Reserve’s Board of Governors. The committee will be chaired by Anthony Ibargüen, CEO of Quench USA, Inc., and chair of the Philadelphia Fed board of directors.

Recruiters say clients generally like to be seen as making bold moves but in the end many remain risk averse when it comes to hiring elite executives, especially into their highly protected upper leadership ranks. They look at insiders as safer bets. Knowing this mindset going in, recruiters say they advise their clients that when they have an inside candidate who is 70 percent as strong as an outside choice to hire the insider. Fit and culture seem to be the deciding factor.

“There is a greater risk when you bring somebody in from the outside that it won’t work out,” said Kathleen Yazbak, founder of Boston-based Viewcrest Advisors, a boutique search firm focused on finding leadership talent for mission-driven and high-performing companies, social enterprises, and philanthropies.

Internal candidates know the business model, organization goals, and inside cultures, say recruiters, and oftentimes they have the requisite skills. They know the customers, clients, and co-workers. They have also established relationships with colleagues and their organization’s leaders. But, more importantly, they have already shown their potential. They can, therefore, assimilate faster and will likely be more satisfied in their new roles than outside hires.

Related: Spencer Stuart Assists St. Louis Fed with CEO Search

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media