Intel tweaks stock options and freezes pay

Intel is seeking approval for a company-wide pay freeze

Intel is rolling out two new shareholder proposals which could affect the financial status of nearly all the company's employees.

In filings with the US Securities and Exchange Commission, the company said that it would seek approval for a company-wide pay freeze and a re-pricing of many of its employee stock options.

The freeze will affect all employees, from chief executive Paul Otellini down. The company noted declining revenues during the current economic crisis as driving factors in its filing.

While employees may not see a pay increase, they could see favourable changes in their stock option prospects. The company is also asking Intel shareholders to approve a new plan which will re-price stock options.

The proposal is being introduced as a remedy for a large number of options which are currently "underwater", or being offered with a purchase price higher than the current market rate for Intel shares.

The re-pricing would bring the price on the employee options down to a more favourable level, encouraging employees to remain with Intel in the hope of exercising the options for a better return.

Google proposed a similar plan earlier this month for its employee stock options.

"You help make Intel the great company it is and I'm pleased to be able to make this long-term investment in you, especially during these uncertain times, " Otellini said in an e-mail to employees.

"I would like to extend a challenge to all of us: let's stay focused on what we need to do to power through this downturn together."

Intel shareholders are set to vote on the proposal on 20 May at the company's annual meeting.