The CEO of Intel has resigned after it was revealed he had a past consensual romantic relationship with another employee. Brian Krzanich was asked to step down from the role he has held since 2013 by the tech company’s board, Intel announced on Thursday. The board said in a statement that Krzanich violated Intel’s non-fraternization policy, which applies to all managers.
“The board believes strongly in Intel’s strategy and we are confident in Bob Swan’s ability to lead the company as we conduct a robust search for our next CEO. Bob has been instrumental to the development and execution of Intel’s strategy, and we know the company will continue to smoothly execute. We appreciate Brian’s many contributions to Intel,” Intel Chairman Andy Bryant said in a statement.
Krzanich, who is married, has not commented about his resignation. The employee who was involved in the relationship with Krazanich has not been identified. Chief Financial Officer Bob Swan has been named as interim CEO, Intel said in its press release.
Here’s what you need to know about Brian Krzanich:
1. The Relationship Took Place ‘Some Time Back,’ but Intel Only Recently Learned About It
Brian Krzanich, 58, was “forced out” by the Intel board, according to CNBC. According to CNBC, the relationship took place and ended “some time back,” but Intel only recently learned about it. CNBC said it is not clear when Krzanich ended the relationship.
Krzanich’s resignation comes after an internal investigation into the matter, according to CNBC.
Intel’s stock has dipped about 2 percent since news of Krzanich’s resignation broke. Krzanich had been highly successful as Intel’s CEO and the company is expecting record profits in the second quarter, “with revenues of approximately $16.9 billion and non-GAAP EPS of approximately $0.99. With accelerating data-centric revenue, the company is off to an excellent start in the first half of the year and expects 2018 to be another record year. Intel will provide full second-quarter results and an updated outlook for the full year on the second-quarter earnings call on July 26,” according to the press release.
Intel said in its release, “The board has a robust succession planning process in place and has begun a search for a permanent CEO, including both internal and external candidates. The board will retain a leading executive search firm to assist in the process.”
2. He Had Worked for Intel Since 1982, Starting as an Engineer, & Earned $21 Million Last Year
Brian Krzanich is a California native, growing up in Santa Clara County. After graduating from San Jose State University in 1982 with a degree in chemistry, Krzanich began working at Intel, first as a process engineer at the company’s chip factory in New Mexico, according to his bio on the company’s website, which has already been deleted. In 1996, he became the manager of a fabrication plant in Arizona. Krzanich continued to move up Intel’s management chain, including operating a plant in Massachusetts. In 2007, he began overseeing the company;’s factor and supply chains. He became COO in 2012 and was promoted to CEO just one year later.
According to his company bio, Krzanich, “drove a broad transformation of Intel’s factories and supply chain, improving factory velocity by more than 60 percent and doubling customer responsiveness.”
Krzanich’s salary has been rising in recent years. He was paid $21.5 million in 2017, according to The Oregonian. That was up from $19.1 million the prior year. Most of his compensation came from stock awards. In a statement, Intel said, the raises were deserved “in light of Mr. Krzanich’s exceptional individual performance in the prior fiscal year and after a review of relevant market data.”
During his time as CEO, Krzanich focused on diversity, with efforts to hire more women and minorities. From 2015 to 2016, Intel saw a 30 percent increase in minority employees after investing $300 million in the effort. During an April 2016 conversation with Jesse jackson, Krzanich said, “People worry that as a white man, you’re kind of under siege to a certain extent. There’s been a bit of resistance. We’ve even had a few threats and things like that on some of our leadership team around our position on diversity and inclusion. We stand up there and just remind everybody it’s not an exclusive process. We’re not bringing in women or African-Americans or Hispanics in exclusion to other people. We’re actually just trying to bring them in and be a part of the whole environment.”
3. Krzanich Sold Shares in the Company Worth $24 Million After Intel Learned Its Chips Sold in the Last Decade Had a Security Vulnerability
Krzanich generated some controversy earlier this year when he sold $24 million in stock after Intel had learned of a serious security flaw in its microchips. According to The Washington Post, lawmakers called for an investigation into whether Krzanich knew about the flaws and made the stock sale before they were publicly revealed. According to The Post, the flaws, “Meltdown” and “Spectre,” were found in June 2017. Krzanich sold nearly 900,000 company shares and stock options in November 2017.
Senators Jack Reed and John Neely Kennedy requested the SEC and Justice Department investigate the stock sale, saying it raises “concerns of potential insider trading.” Intel issued a statement saying there was nothing improper about the stock sale and said it “will cooperate fully with any governmental inquiries or investigations.” It is not clear if any investigations are underway.
“Brian’s sale is unrelated,” to the security flaw, Intel said in a statement. “It was made pursuant to a pre-arranged stock sale plan (10b5-1) with an automated sale schedule. He continues to hold shares in-line with corporate guidelines.”
After the security flaw was revealed, Krzanich said security was the top priority for Intel and they were working to make sure the issue never happened again. He told CNBC in January he was “relatively confident” that the leaked security issue had not been exploited and said they had been working for months to address it.
“We’ve found no instances of anybody actually executing this exploit,” he said. “I mean, it’s very hard — we can’t go out and check every system out there. But when you take a look at the difficulty it is to actually go and execute this exploit — you have to get access to the systems, and then access to the memory and operating system — we’re fairly confident, given the checks we’ve done, that we haven’t been able to identify an exploit yet.”
Despite the security issue, Intel’s stock has continued to rise. It was at $54.5 on Thursday, prior to Krzanich’s resignation, and then dipped to $54.44. The stock was at $43.95 when Krzanich sold his shares in late November.
4. He Has Had a Complicated Relationship With President Trump
Krzanich’s personal politics are not entirely clear. According to The Oregonian, Krzanich switched his California voter registration to confidential in 2016, which requires, “a showing of good cause that a life-threatening circumstance exists to the voter or a member of the voter’s household.” Krzanich was paid $1.2 million to cover “personal security arrangements,” in 2017 and 2016, as a result of “the need to respond to specific Intel-related incidents and threats,” according to The Oregonian. At Intel, Krzanich led diversity efforts, supported immigration reform, legal protections for DREAMers and transgender rights. But he also has a complicated relationship with President Donald Trump.
In 2016, Krzanich cancelled a fundraiser for Trump that was scheduled to be held at his home in California, after the New York Times asked him about it. Intel said in a statement the fundraiser was planned as a “a full exchange of views.” Krzanich later told Fortune it was not originally planned as a fundraiser.
“Originally it was supposed to be a conversation about issues, and I am passionate about these issues,” he said. “The issues of diversity, the issues of making America strong in manufacturing, making us competitive in tax. It was supposed to be a discussion about issues with a small group of us. It turned into a fundraiser, and that’s when we backed out…I really don’t think people in the tech industry, our job is not to get behind one candidate. Our job is to get behind issues.”
Intel made donations to both Republicans and Democrats during Krzanich’s time at the helm. In June 2016, he tweeted, “I do not intend to endorse any Presidential candidate. We are interested in engaging both campaigns in open dialogue on issues in technology.”
After the election, Krzanich was named as part of Trump’s American Manufacturing Council. In January 2017, Krzanich spoke out against Trump’s Muslim travel ban. He told employees, “I have heard from many of you, and share your concern over the recent executive order and want you to know this is not a policy we can support,” and tweeted, “as a company co-founded by an immigrant, we support lawful immigration. We will provide impacted employees with Intel’s full support.”
But, in February, Krzanich joined Trump at the White House to announce a $7 billion investment in a new factory in Chandler, Arizona. He also expressed support for Trump’s regulatory and tax policies. In August 2017, Krzanich became the third executive to leave the manufacturing council after Trump’s comments about white supremacists following the “Unite the Right” rally in Charlottesville, Virginia.
5. Krzanich Is Married to a Former Intel Employee & Has 2 Daughters
Brian Krzanich is married to Brandee Krzanich and they have two daughters. Krzanich and his wife live in Atherton, California.
Brandee Krzanich has worked as a real estage agent at REeBroker Inc. since August 2013 in the San Francisco area, according to her Linkedin profile. She was previously the founder, CEO and director of Montessori Educare Inc., in Phoenix and was an agent for several years at Geneva Real Estate Investments in Arizona. She worked at Intel as a process engineer from May 1996 to August 1998. She graduated from Texas A&M University in 1996 with a degree in chemical engineering and completed her MBA at Harvard Business School in 2000.
Brian and his wife have been married since 1998.