AMD is willing to pay out big rewards to some of the company's top executives to both stay on board and hit performance goals. A Form 8-K filed to the United States Securities and Exchange Commission (SEC) filed earlier this month show the company's board of directors approving a salary increase for CEO Dr. Lisa Su, as well as target bonuses for both Su and CTO Mark Papermaster. Usain Pirzada highlighted the SEC form on Twitter.
The company's board is now offering three awards. For Su, there's a "CEO Annual LTI Award" to Su with a target value of $11,651,000 and a "CEO Value Creation Equity Award" with a target value of $25 million (slightly less than 25 times her salary). For Papermaster, a "CTO Value Creation Equity Award" has a target value of $7 million.
As of July 1, Su's annual salary increased to $1,055,000 (a $55,00 increase). Additionally, her target bonus will increase to 170% of her 2019 base salary, up from 150%.
All three awards will be made in performance-based restricted stock units (PRSUs), stock options, and "time-based restricted stock units." For the CEO Annual LTI Award, Su will be rewarded based on "the Company’s stock price relative to the return on the S&P 500 Index, in each case over the performance period that begins on August 9, 2019 and ends on August 9, 2022," as well as non-GAAP earnings per share growth from fiscal years 2019 to 2021.
The two Value Creation Equity Awards will both be in PRSUs, and the number earned will be tied to "five-year compounded annual growth rate milestones" tied to AMD's 60-trading day average closing stock price from the date of the grant through August 9, 2024. These vest on the third and fifth anniversaries of the rewards, encouraging both Su and Papermaster to stay in their positions for at least that long.
Other conditions of the rewards can be found in the 8-K filing.
Recently, Su quashed rumors that she would be leaving AMD for a role at IBM. And if these potential monetary rewards are in her sights, we may know one reason why she plans to stay.
capitalism leads to the same thing communism does, the pyramid, only the few at the top make anything. difference is capitalism works better and making the rich richer (longer) and takes a much longer time to destroy the underclass
Why the assumption that everyone who works under a CEO is making peanuts? You're also assuming low and mid-level employees are incapable of career advancement (at AMD or elsewhere) and are perpetually stuck in their respective (consented) salaries.
Sure, CEO's like Jeff Bezos are multi-billionaires but they've also created thousands of jobs, helped people make extra cash via side gigs, and improved the consumer lifestyle (e.g. Amazon Prime).
Why is Dr. Su at fault for bringing the company back from years of CPU mediocrity to spanking Intel? (A first for AMD considering their traditional MO) Every employee at AMD consented to their salary and are free to leave to start their own business or switch to a better-paying job at any time (aka career mobility). Also just because Dr. Su is getting a 25x bonus doesn't mean other employees are being robbed of their legally-obligated compensation.
As a former junior, senior software engineer and lead developer I know others made larger bonuses but I got substantial bonuses as well when I showed my commitment to time and performance as well. It pays to be a top contributor and show some semblance of commitment to most companies large and small, especially those that get purchased by a bigger company.
She obviously has great confidence in herself and the market to take such a low base salary (less than the minimum salary allowed for a US NBA basketball player) with large market based incentives. Right now it looks like it paid off.
I'm just as concerned about executive compensation as anyone, but I think she's unquestionably earned a bonus and companies typically have executive compensation committees to make sure their compensation packages and awards are in line with current practices.
I'd suggest reserving your outrage for the execs that resign in disgrace, yet still get big payouts, thanks to their golden parachutes (I seem to recall this happened after the Equifax data breach, or something like that). Or CEOs that get bonuses for cutting costs by initiating massive layoffs and off-shoring efforts.
Except it doesn't work like that. The shares & options vest over a 5-year period. I think the value is projected based on the current share price, but it might be lower.
If they were to actually hire those engineers, they would incur those costs annually. Also, your estimate doesn't seem to cover various overheads.
What would be far more disheartening would be to lose competent executives, especially in light of the previous clowns who helped dig such a hole for AMD that they've been struggling to get out of.