- Intel CEO Brian Krzanich sold off $US24 million worth of stock and options in the company in late November.
- The stock sale came after Google had informed Intel of a significant vulnerability in its chips – a flaw that became public only this week.
- Intel says the stock sale was unrelated to the vulnerability and came as part of a planned divestiture program. But Krzanich put that stock-sale plan in place in October – several months after Intel was informed of the vulnerability.
Intel CEO Brian Krzanich sold off a large portion of his stake in the company months after Google had informed the chipmaker of a significant security vulnerability in its flagship PC processors – but before the problem was publicly known.
The vulnerability, which affects processors from Intel, AMD, and ARM and could allow malicious actors to steal passwords and other secret data, became public this week. The disclosure has left processor makers and operating-system vendors including Intel and Microsoft scrambling to get on top of the story and patch their products.
But while the public is just being informed about the security problem, tech companies have known about it for months. In fact, Google informed Intel of the vulnerability in June, an Intel representative told Business Insider in a statement.
That means Intel was aware of the problem before Krzanich sold off a big chunk of his holdings. Intel’s CEO saw a $US24 million windfall November 29 through a combination of selling shares he owned outright and exercising stock options.
The stock sale raised eyebrows when it was disclosed, primarily because it left Krzanich with just 250,000 shares of Intel stock – the minimum the company requires him to hold under his employment agreement.
But the sell-off could draw even more scrutiny now, given the news about the security vulnerability and the timing of when Intel knew about it.
A representative for the Securities and Exchange Commission declined to comment on whether it was looking into the stock sales.
Intel says the sale was preplanned – but that plan was put in place months after it learned of the chip vulnerability
In the statement, the Intel representative said Krzanich’s sale had nothing to do with the newly disclosed chip vulnerability and was done as part of a standard stock-sale plan.
“Brian’s sale is unrelated,” the representative said in the statement, adding that Krzanich “continues to hold shares in line with corporate guidelines.”
To avoid charges of trading on insider knowledge, executives often put in place plans that automatically sell a portion of their stock holdings or exercise some of their options on a predetermined schedule, typically referred to as Rule 10b5-1(c) trading plans. According to an SEC filing, the holdings that Krzanich sold in November – 245,743 shares of stock he owned outright and 644,135 shares he got from exercising his options – were divested under just such a trading plan.
But Krzanich put that plan in place only on October 30, according to the filing. The representative said his decision to set up that plan was “unrelated” to information about the security vulnerability. Still, the timeline raises questions.
News of the security flaw helped send Intel’s stock lower Wednesday. It closed down $US1.59, or 3.4%, to $US45.26.