Intel’s Barrett to
Pass Chairman Role to Shaw in May (Update4)
BLUE CROWN
FUTURES
By Rochelle Garner
Jan. 23 (Bloomberg) -- Intel
Corp., the world’s biggest chipmaker, named Jane
Shaw to succeed Craig
Barrett as chairman, breaking with tradition by
appointing someone from outside the executive ranks.
Barrett, a 6-foot-3 engineer who is best known
for overhauling and standardizing Intel’s
manufacturing plants as chief executive officer,
will leave after the annual shareholder meeting in
May, the Santa Clara, California-based company said
today. Shaw has served on the board since 1993.
In the past two successions, Intel has given the
chairman role to a former or current CEO. Barrett,
69, became chairman in May 2005 after passing the
CEO role to Paul
Otellini. The appointment of an outsider
reflects a broader shift to making boards more
independent.
“It’s good to have a separate CEO and
chairman,” said Brian
Piccioni, an analyst with BMO Capital Markets in
Toronto. He advises investors to buy Intel’s
shares, which he doesn’t own personally. “There
should be some level of tension between the two
roles.”
Barrett was the first person to lead Intel other
than its original founders, Robert
Noyce, Gordon
Moore and Andy
Grove. His wife, Barbara, was second in command
at the Federal Aviation Administration under
President Ronald
Reagan. They own a ranch in Montana.
Andy Grove
Before Barrett became CEO, Grove was both chief
and chairman. Grove became chairman alone after
Barrett took the CEO job in 1998.
“We periodically review the makeup of the
board, and it was decided at this time that Dr. Shaw
would be more appropriate as chair,” Intel
spokesman Chuck
Mulloy said in an interview.
Barrett stepped down as CEO after reaching
Intel’s mandatory retirement age of 65. While
chief, Barrett boosted productivity by making sure
every factory was identical, with the same machines.
“His legacy has been turning Intel into a
manufacturing powerhouse,” said Uche
Orji, an analyst with UBS Securities LLC, who
advises buying the stock. “It became more reliable
and the concept of reliability in manufacturing is
now taken for granted, but in the ‘70s and ‘80s
it wasn’t.”
Outsiders can help bring needed changes to a
company, said David
Wu, an analyst a Global Crown Capital in San
Francisco.
“This is unusual for Intel, but that doesn’t
mean it’s not right,” Wu said. “A chairman of
the board should be, theoretically, using best
practice, not from the same company.”
Pharmaceuticals Background
Shaw, 69, has headed Intel’s compensation and
audit committees, and is currently lead outside
director. She was chairwoman and CEO of AeroGen
Inc., a maker of drug-delivery systems, until it was
acquired by Nektar Therapeutics in 2005. She
previously was chairman of Intrabiotics
Pharmaceuticals from 1996 to 2000. She currently
sits on the boards of Talima Therapeutics Inc. and
McKesson Corp.
Intel rose 30 cents to $13.12 at 4 p.m. New York
time in Nasdaq Stock Market trading.
The shares lost 45 percent in 2008.
After becoming CEO, Barrett moved Intel into new
markets, such as consumer electronics and the
hosting of business Web sites. After the dot-com
bust in 2000, he shut some of those businesses and
refocused on chips.
He wasn’t afraid of making dramatic gestures.
In October 2004, Barrett walked onto a stage during
a industry conference in Florida, got down on his
knees in front of more than 6,000 technology
executives, and begged forgiveness for
overestimating chip demand.
Intel said this week that it will close five
factories that employ as many as 6,000 people,
including its last plant in Silicon Valley. A
reduction in demand for PC chips has forced Intel to
run operations below capacity. Last week, Intel
reported a 90 percent drop in fourth-quarter net
income.
To contact the reporter on this story: Rochelle
Garner in San Francisco at rgarner4@bloomberg.net.
Last Updated: January 23, 2009 16:21 EST
