Most of Otellini's 2012 compensation package consisted of stock awards and options valued at $11.9 million, up from $9.1 million from the previous year. Intel raised his salary by 9 percent last year to $1.2 million. The rest of his compensation consisted of more than $523,000 to cover contributions to his retirement and deferred compensation plans, financial planning expenses and a new security system for his home.
Otellini also reaped a $16.1 million gain from exercising 1.9 million of Intel stock options issued to him before 2012, according to Wednesday's filing with the Securities and Exchange Commission. That windfall isn't included in the calculation of last year's compensation package.
The Associated Press' formula for executive compensation takes into account salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits, which makes the AP total slightly different in most cases from the total reported by companies to the SEC.
The values that companies assign for executive's stock and option awards are based on estimates on what the awards are expected to be worth over time.