INTC Intel Corporation

By Cara Lombardo and Jay Greene 

Intel Corp. ex-Chief Executive Brian Krzanich's affair with an employee, which cost him his job this week, started before he was CEO and ended several years ago, according to people familiar with the matter.

The relationship, which started about a decade ago, came into public view this week when Mr. Krzanich, 58 years old, resigned after the chip maker determined he had violated company policy by having a relationship with a co-worker.

The woman involved in the affair still works at Intel, the people said. She was in middle management when it began, still doesn't hold a senior role at the company and didn't work closely with Mr. Krzanich, they said.

Mr. Krzanich, who couldn't be reached for comment, had worked at Intel since 1982 and became CEO in 2013 after rising through a series of technical and leadership roles. The company declined to comment on his marital status.

It is not clear when exactly the relationship ended. Earlier this week, the company said in a statement that an investigation by internal and external counsel confirmed a violation of its non-fraternization policy, which was put into place in 2011 and prohibits managers from having sexual or romantic relationships with direct or indirect reports.

The recent chain of events was triggered when the employee mentioned the relationship to a colleague, the people said. This colleague, knowing company policy prohibits such relationships, felt compelled by the company's rules to report it to Intel's general counsel, and did so on June 14, the people said.

Soon after receiving the tip, the general counsel informed the board about the relationship. The board initiated an investigation, which it has said is ongoing.

By Wednesday, Mr. Krzanich had submitted his resignation, according to a securities filing Thursday.

Intel has a relatively strict policy governing fraternization compared with other companies. The policy is a "hard ban" that applies to all managers regardless of seniority and requires employees to raise any concerns immediately.

The episode comes after the #MeToo movement put a bright light on inappropriate workplace conduct, forcing a number of senior corporate officials out of their jobs.

Robert Swan, who has been the company's chief financial officer, was named interim CEO. He has said he isn't interested in keeping the role. Intel stock has fallen about 3.5% since the revelation, closing Friday at $52.50 and giving the chip giant a market value of $245 billion.

Write to Cara Lombardo at cara.lombardo@wsj.com and Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

June 22, 2018 23:07 ET (03:07 GMT)

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