By Austen Hufford and Aisha Al-Muslim 

Intel Corp. Chief Executive Brian Krzanich resigned after the company determined he violated company policy during a past, consensual relationship with an Intel employee.

The company said that a continuing investigation by internal and external counsel confirmed a violation of Intel's non-fraternization policy, which applies to all managers.

Intel said it accepted Mr. Krzanich's resignation on Wednesday. The company said it expects all employees to respect Intel's values and adhere to its code of conduct. Mr. Krzanich couldn't be reached for comment.

Intel has a longstanding, non-fraternization policy that prohibits managers from having sexual or romantic relationships with employees who report directly or indirectly to them, a spokesman for the company said. The spokesman called the policy a "strict" and "hard ban" that he said applies to all managers regardless of seniority level. The policy also requires that employees who see or believe someone acted inappropriately to raise their concerns immediately, he said.

The board said Chief Financial Officer Robert Swan would become interim CEO, effective immediately. Mr. Swan joined Intel in 2016 after being CFO of eBay Inc. Intel has started a search for a permanent leader and is considering internal and external candidates.

Intel's shares fell 2% to $52.50 in late-morning trading in New York. Along with the CEO news, the chip maker provided a better-then-expected financial outlook for the current quarter.

While details of the relationship weren't disclosed Thursday, the public resignation highlights the discussions happening in workplaces around the country over how employers should regulate office romances.

Dating policies at U.S. companies vary. Some employers don't allow senior managers to have relationships with co-workers, even if they are not direct reports. The idea is that even if a manager doesn't directly oversee an employee, they may have more power within the organization. Other companies have no issue with consensual relationships but have asked for them to be disclosed. Still others have no dating policy at all.

Some companies have been revamping their rules around workplace relationships in the wake of the #MeToo movement. Intel, like many other technology companies, has said it was working to increase gender and racial diversity in its workplace. In its 2017 diversity report, the company said 73.5% of its total workforce was male.

Mr. Krzanich joins other CEOs who left following allegations of relationships with employees, including Harry Stonecipher, who left as CEO of Boeing Co. in 2005; Steven Heyer, who left Starwood Hotels & Resorts Worldwide Inc. in 2007; and Christopher Kubasik, who was the CEO-in-waiting when he left Lockheed Martin in 2012.

Mr. Krzanich started at Intel in 1982, rising through a series of technical and leadership roles to become chief executive in 2013.

As CEO, Mr. Krzanich set about a broad effort to diversify the company's offerings beyond its stronghold in chips for personal computers and servers. He built out the data center group to include not only server chips but also ancillary technologies. such as memory and fast interconnections. He also worked to beef up Intel's position in the Internet of Things, a phrase that describes the trend toward outfitting a variety of household and industrial equipment with computing and communications capabilities.

In recent months, Mr. Krzanich has emerged as a leading proponent of the commercial drone industry, primarily by publicly championing the company's technology and serving as chairman of a high-level federal aviation advisory committee.

Since being named CEO, Intel's share price has risen 123%, outpacing the S&P 500 but underperforming the PHLX Semiconductor Sector Index. Sales have grown nearly 18% between 2012 and 2018 to $62.76 billion. Last year, Intel held a 99% share of the most popular type of chips used in servers, and a 91% share of the processors found in PCs, according to Mercury Research.

The company also released a financial forecast that was above analyst expectations. For the current second quarter, the company expected adjusted earnings of 99 cents a share and revenue of $16.9 billion. Analysts polled by FactSet had expected adjusted earnings of 86 cents a share and revenue of $16.3 billion.

--Andy Pasztor contributed to this article.

Write to Austen Hufford at austen.hufford@wsj.com and Aisha Al-Muslim at aisha.al-muslim@wsj.com

 

(END) Dow Jones Newswires

June 21, 2018 11:53 ET (15:53 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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