Intel’s CEO Brian Krzanich sold off no less than $24 million in company stock in late November in a move that took many by surprise, mostly because this left the executive with only 250,000 shares, which is the minimum required by the firm as part of the employment agreement.
The controversy around this unexpected sell-off is fueled today by the revelations of a major vulnerability affecting Intel chips,which makes it possible for malicious actors to steal passwords and other sensitive data from any computer powered by Intel hardware.
Google had discovered the security flaw and reported it to Intel in June last year, only a few months before the company’s CEO took the decision to sell off the shares.
According to reports, Krzanich announced his intention to sell his stock holdings on October 30, and an SEC filling reveals that the trading plan includes 245,743 shares of stock he owned and 644,135 shares obtained following his stock options.
Sell-off “unrelated” to security bug report
While at first glance it seems that the CEO sold off the stock as a result of Google finding the critical vulnerability in the chips, Intel says the after reference is more of a timing indicator, as the two events aren’t related in any way.
In other words, Krzanich sold off all of his shares (except for the amount required by the company agreement) as part of a pre-planned stock sale and not because Google discovered the security flaw in the Intel hardware – and which would have obviously caused a substantial drop in company stock price.
“Brian’s sale is unrelated. He continues to hold shares in-line with corporate guidelines,” a company representative was quoted as saying by the cited source. Furthermore, the spokesperson added that the sale has nothing to do with the information it received from Google about the security vulnerability.
As for the reasons Intel didn’t release a firmware update to correct the flaw after learning about it from Google, there are claims that this might once again be related to the sales sell-off. Despite Intel clearly stating the two key moments are unrelated, shipping an update voluntarily means the company had no other option than to acknowledge the vulnerability, which in turn would have caused a massive share price drop.
An official explanation for not shipping a patch earlier isn’t available, but it’s believed an emergency fix could have a major impact on system performance.
At the time of writing this article, Intel stock is down $1.59 (3.39%) to $45.26, with a further decline of 0.91% to $44.85 in after-hours trading.