The legal action by LR Trust, demands that both return their compensation and other financial gains to Intel, including Gelsinger’s $207 million salary from 2021 to 2023. 

The lawsuit alleges that Intel’s leadership failed to adequately disclose the challenges facing its IFS division, which has reportedly struggled to attract significant clients among major fabless chip designers while incurring substantial losses.

According to the suit, Intel’s 2024 Proxy Statement omitted critical risks associated with IFS, an issue that mirrors earlier legal complaints against the company. 

LR Trust claims that Chipzilla executives and board members issued misleading public statements about the growth potential of IFS while obscuring its financial difficulties. The division reportedly suffered a $7 billion operating loss in 2023, with losses escalating in 2024 as Intel increased spending on new fabrication facilities. 

The lawsuit further alleges that the company’s disclosures regarding cost savings, operational efficiencies, and the profitability of IFS were “materially false and misleading.” LR Trust asserts that these misrepresentations harmed the company by painting an overly optimistic picture of its foundry operations. 

In addition to financial damages, the lawsuit seeks the return of compensation received by Gelsinger and Zinsner during their tenure. This includes salaries, stock awards, and bonuses, which LR Trust argues were unjustified given the alleged mismanagement and financial misrepresentation under their leadership. 

The plaintiffs demand that damages awarded through the lawsuit be paid to Intel rather than to LR Trust or other individual shareholders. Such an outcome, if achieved, could bolster the company’s financial position and potentially benefit long-term shareholders indirectly.