Leading executives at AMD saw their salaries balloon last year due to bonus awards, according to documents filed with the Securities and Exchange Commission.
Jerry Sanders, AMD's CEO, received $7.2 million in cash and 1.2 million stock options with a strike, or exercise price, of $23.75 as compensation for 2000. In 1999, he received $3.8 million in cash and no options. In the past, Sanders' salary, which starts with a guaranteed $1 million salary, has drawn complaints and proxy fights from shareholders.
Sander's 2000 package would have been $1.2 million higher but for a cap on bonuses. Sanders actually earned a bonus of approximately $6.2 million under AMD's compensation formula, but his contract limits his bonus to $5 million. The unpaid excess, however, will be carried over to subsequent years and paid if permitted by the formula.
Executive Vice President of sales Rob Herb, meanwhile, saw his annual compensation grow from $907,000 and 150,000 options in 1999 to $3.3 million and 300,000 in options. William Siegel, senior vice president of technology and manufacturing, received a boost from $734,000 and 108,000 options to $1.4 million and 150,000 options.
As with Sanders' compensation, a substantial portion of the increase came from bonuses. Herb's bonus, for instance, grew from $570,000 in 1999 to $2.7 million in 2000. The compensation figures for all three and other AMD executives include salary, bonuses and other compensation, a catchall category that encompasses company cars, insurance, cost of living increases and other consideration.
Hector Ruiz, AMD's president, earned $752,000 in salary, $3.1 million in bonuses, and 500,000 stock options, Ruiz joined the company in 2000.
The company has already officially announced that Ruiz will succeed Sanders as CEO at the stockholder's meeting in April 2002. At the end of 2003, Sanders will also step down as chairman.
Last year was a banner period for the Sunnyvale, Calif.-based chipmaker. The Athlon processor, released in 1999, caught on with PC makers and consumers and allowed AMD to graduate from serving the budget end of the PC market to the more profitable performance end.
The company also managed to improve its manufacturing performance, a feat partly attributed to some analysts to Siegel.
A dire, industrywide shortage of flash memory also boosted company profits.
Although it missed estimates in the fourth quarter, AMD reported $4.6 billion in annual revenue, a 63 percent increase over $2.9 billion in revenue in 1999. Net income, excluding extraordinary events, came to $794 million, compared with a loss of $89 million the year before.
Both the PC processor market and the market for flash have shrunk in 2001. AMD, however, has yet to issue a dire financial warning for the first quarter or announce layoffs.