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AMD's Sanders takes pay cut

The chipmaker last year cut back the compensation package of its chairman and chief executive Jerry Sanders, according to an SEC filing.

Advanced Micro Devices (AMD) last year cut back the compensation package of its chairman and chief executive Jerry Sanders, a chip executive who in the past has been taken to task for being one of the industry's highest paid executives during times when his company didn't shine.

Sanders received a slight reduction in his base salary to $1 million last year, down from $1.03 million the previous year. And he did not earn a bonus or receive any options last year, according to a Securities and Exchange Commission filing yesterday.

But other forms of compensation from vehicles to physical security services rose to $256,928 last year, up from $217,818 the previous year. And all other compensation such as a deferred retirement compensation and a cost-of-living salary adjustment came to $472,812 in 1997, up substantially from $49,454 the previous year.

All told, Sanders's earned compensation reached $1.7 million in 1997. That's down from the previous year's package of $1.3 million and 2.5 million shares in options granted, with a strike price of $14.75. AMD's shares were trading around $40 at the time the options were disclosed in the 1996 proxy.

Although Sanders did not earn a bonus last year or in 1996, he was able to carry over portions of bonuses he earned in previous years. The CEO had $617,817 in bonus carry-overs last year, and $2 million in the previous year.

Sanders's reduced compensation package came as AMD managed to shrink its loss to $21.1 million in 1997, compared with a loss of $69 million the previous year. And the chipmaker grew revenues to $2.36 billion for the year, up from $1.95 billion a year earlier.

But AMD's stock, nonetheless, dropped 34.6 percent to end the year at 17-3/4, down from 27-1/4 at the start of 1997. The falling stock was attributed to the company's struggle to get a handle on its manufacturing as it shifted toward a smaller chip. AMD has been looking to increase its chip yields--the number of usable chips that roll off the manufacturing line.

And earlier this year, AMD was cited by pension fund giant and shareholder activist California Public Employees Retirement System on its list of corporate underperformers, due to its flagging stock price.