Intel Corp., the world’s largest chipmaker, said it will require more executives to own stock and tie bonuses to operating goals, moves aimed at connecting pay more closely with the company’s financial performance.

Starting this year, 350 senior leaders will have to own specified amounts of shares, the Santa Clara, California-based company said yesterday in a letter to shareholders. That’s up from the 50 executives covered under existing guidelines.

Intel said it is changing its pay structure following input from investors, seeking to align its compensation with the interests of shareholders. The stock rose 26 percent last year, compared with a 30 percent gain in the Standard & Poor’s 500 Index. Sales (INTC) slipped for a second straight year. The rules are being instituted under Chief Executive Officer Brian Krzanich, who was promoted to the company’s top job in May.

“The company is clearly in transition and they need to adjust the compensation structure to motivate employees to do well,” said Patrick Wang, an analyst at Evercore Partners Inc. in New York. Wang has the equivalent of a sell rating on Intel stock. “This is a good change.”

Investors in public companies are increasingly voting against proposals for executive pay, said Aaron Boyd, director of governance research at Equilar Inc., which tracks executive compensation. Intel may spur a trend he said.

“We’re going to see more compensation designs and plans based on conversations with shareholders,” said Boyd, who’s based in Redwood City, California. Intel has “always been a leader when it comes to trying to align pay with performance.”
Pay Metrics

Cash bonuses for employees will be determined more by the performance of the business units they work for, Intel said. The weighting of that metric will rise to 50 percent of the total calculation from the current 33 percent, Intel said. Total net income and earnings compared with peer companies are the other two bases for calculations the company uses.

The company also said performance-based stock grants will no longer have a minimum value, and if total shareholder return over three years falls below a certain level, there will be no payout.