Intel tweaks stock options, freezes pay

In filings with the US Securities and Exchange Commission (SEC) the company said that it would be seeking approval for a company-wide pay freeze and reprice many of its employee stock options.

The freeze will effect all employees from chief executive Paul Otellini on down. The company noted declining revenues amidst 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 hopes of getting a 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 May 20 at the company's annual meeting.