MW Who needs a CEO? Not Intel. Its stock has soared this month without one.

By Steve Gelsi

Intel's stock is up 28% in February with the Silicon Valley chip company being run by a team of three executives. Could this become a model for other companies?

The recent run-up in Intel Corp.'s stock has come while the chip giant is missing something usually assumed to be a prerequisite for a successful company: clear and centralized leadership.

Intel's stock $(INTC)$ has soared 28% in February even as the company has continued its search for a permanent CEO after Pat Gelsinger abruptly retired in early December

Gelsinger's tenure as chief executive had seen Intel potentially lose its competitive edge amid a race to the artificial-intelligence future. Its stock tumbled while shares of rivals such as Nvidia $(NVDA)$ climbed. Since Gelsinger's resignation, though, Intel's stock has gained 4%.

Intel, a Silicon Valley pioneer founded in the late 1960s, doesn't seem to be in too big a rush to slot someone into the top job. The company is currently being run by a new interim executive chair and two interim co-chief executives who are simultaneously working as Intel's chief financial officer and the chief of its products division.

On Dec. 30, almost a month after Gelsinger retired, the company said it had no fresh comment on a successor, and an Intel spokesperson told MarketWatch on Feb. 14 there have been no updates to the company's statement at that time.

Intel's stock has risen amid reports that Broadcom $(AVGO)$ and Taiwanese Semiconductor Manufacturing Co. $(TSM)$ (TW:2330) are looking at deals to purchase Intel assets.

If the trend for Intel's stock continues, it'll join a short list of companies that have thrived with no permanent chief executive at the helm.

Does a company really need a CEO if the business can improve its prospects without one? Or, to put another way, is it worth it to have an executive that typically earns hundreds of times more than the average worker when the company can be run successfully by the people responsible for doing most of the work?

The answer appears to be that in most companies a CEO is required, according to experts, particularly if you're hoping for long-term success.

Despite the good run from Intel's stock of late and the occasional example of a successful company without a long-term CEO, business-school professor Donald Hambrick of Pennsylvania State University said the role of a clear leader at a company is a must.

"Because of its well-honed procedures, an established company such as Intel can run smoothly - on its current track - without a CEO for a while," Hambrick said in an email to MarketWatch. "But the fact is that Intel is currently struggling and needs to change its strategy - and in turn needs a CEO to orchestrate that change."

If a company chooses not to promote from within, it can take a while to find a CEO. And a company will have to pay up to get talent from a rival or a related industry. According to a survey by the Institute for Policy Studies, CEOs made an average of 538 times the pay of their most typical workers in 2024, among the 100 companies in the S&P 500 SPX with the lowest median wages.

Some companies have successfully operated without CEOs for years

While Intel has given no indication it's slow walking its CEO search, a few companies have done away with the highly compensated chief-executive job entirely - some temporarily, others permanently.

Among them, "Steam" videogame platform developer Valve Corp. said it's been "boss free" since its founding in 1996 because "we believe the best product decisions are made by the people who are actually doing the work."

To be sure, Valve Corp. has a strong chairman, Gabe Newell, who has a net worth of $9.5 billion and owns about half of the privately held company, according to Forbes.

And then there's Ricardo Semler, the former majority owner of Brazilian conglomerate Semco, who wrote in the Harvard Business Review in 1989 about how he organized Semco with fewer layers between top management and workers.

"The organization pyramid is the cause of much corporate evil because the tip is too far from the base," Semler wrote. The article's headline: "Managing Without Managers."

Semler said his company's performance improved under a policy of employee ownership and a structure that reduced the company's hierarchy to three management levels.

"Pyramids emphasize power, promote insecurity, distort communications, hobble interaction, and make it very difficult for the people who plan and the people who execute to move in the same direction," Semler said.

To this day, Semco has no headquarters or organizational chart. It even lacks job titles.

"When no one's in charge, everyone is responsible - for acting in the team's best interest, for providing the kind of product and service experience customers demand, and for growing the business," Semco explains on its website.

Operating without a CEO comes with risks

Still, operating over the long term without a CEO is not the norm, and for good reason, said Diana Scott, the leader of the U.S. Human Capital Center at the Conference Board, the big-business trade group and think tank.

An orchestra may comprise the best musicians in the world, but a good conductor - like a good CEO - interprets the music and creates a work that's stronger than its parts, she said.

Indeed, most companies prefer to have a CEO, even those featured in a 2016 Wall Street Journal article about companies managing with no CEO.

Luxury-goods specialist Compagnie Financière Richemont SA $(CFRHF)$ - owner of such luxury brands as Cartier and Van Cleef & Arpels - said in 2016 it had no plan to replace retiring Richard Lepeu in a move to eliminate the role of CEO.

But last May, Richemont ended a CEO-free period that had lasted nearly 10 years by naming former Van Cleef & Arpels chief Nicolas Bos as CEO.

"The re-established CEO role will help streamline decision making and optimize operational management," the company explained.

Peakon, a maker of employee-engagement software, was running without a CEO for years prior to its 2021 acquisition by Workday Inc. (WDAY) for $700 million. For its part, Workday is led by CEO Carl Eschenbach.

Retailing giant Abercrombie & Fitch $(ANF)$ was without a CEO for more than two years after Mike Jeffries left the company in 2014, but the retailer tapped Fran Horowitz as CEO in 2017. She remains at the helm of the retailer, while Jeffries was arrested last fall on sex-trafficking charges.

"Leaders today who recognize the diversity of talent they have access to and who figure out how to inspire them - they'll get the best out of their employees and deliver the best results for their customers," said the Conference Board's Scott.

-Steve Gelsi

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February 24, 2025 07:59 ET (12:59 GMT)

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