DEF 14A of Advanced Micro Devices Inc
Filed Mar 25, 2024 · FY20230001193125-24-076513
Annual Report on Form 10-K for the fiscal year ended December 30, 2023 are available at
| | Page | | GRANTS OF PLAN-BASED AWARDS IN 2023 | 73 | | OPTION EXERCISES AND STOCK VESTED IN 2023 | 75 | | 2023 NONQUALIFIED DEFERRED COMPENSATION | 76 | | SEVERANCE AND CHANGE IN CONTROL ARRANGEMENTS | 77 | | CHIEF EXECUTIVE OFFICER PAY RATIO | 85 | | PAY VERSUS PERFORMANCE TABLE | 86 | | EQUITY COMPENSATION PLAN INFORMATION | 89 | | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 90 | | AUDIT AND FINANCE COMMITTEE REPORT | 91 | | ITEM 2—RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 92 | | Required Vote | 92 | | Recommendation of the Board of Directors | 92 | | Independent Registered Public Accounting Firm’s Fees | 93 | | Pre-Approval Policies and Procedures | 93 | | ITEM 3—APPROVAL ON A NON-BINDING, ADVISORY BASIS OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”) | 94 | | Required Vote | 95 | | Recommendation of the Board of Directors | 95 | | ITEM 4—STOCKHOLDER PROPOSAL REQUESTING A STOCKHOLDER RIGHT TO CALL A SPECIAL MEETING | 96 | | Required Vote | 96 | | INCORPORATION BY REFERENCE | 99 | | AVAILABLE INFORMATION | 99 |
ITEM 1—ELECTION OF DIRECTORS
ITEM 1—ELECTION OF DIRECTORS Our Board currently consists of nine members. On the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the following nine nominees: Ms. Nora M. Denzel, Mr. Mark Durcan, Mr. Michael P. Gregoire, Mr. Joseph A. Householder, Mr. John W. Marren, Mr. Jon A. Olson, Dr. Lisa T. Su, Mr. Abhi Y. Talwalkar, and Ms. Elizabeth W. Vanderslice for election to the Board at the Annual Meeting. All directors are elected annually and serve a one-year term until our next annual meeting or until such director’s successor is appointed. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement. The Board expects all nominees named below to be available for election. If a nominee declines or is unable to act as a director, your proxy may vote for any substitute nominee proposed by the Board. Your proxy will vote FOR the election of these nominees, unless you instruct otherwise. Directors are strongly encouraged to attend annual meetings of our stockholders. All of the directors attended the 2023 Annual Meeting of Stockholders.
Director Experience, Skills and Qualifications
Director Experience, Skills and Qualifications Our goal is to assemble a Board that operates cohesively and works with management in a constructive way to deliver long-term value to our stockholders. We believe that the nominees set forth below, all of whom are currently directors of AMD, possess valuable experience necessary to guide us in the best interests of our stockholders. Our current Board consists of individuals with proven records of success in their chosen professions. They are collegial, yet independent in their thinking, and are committed to the hard work necessary to be informed about the semiconductor industry, us, and our key constituents, including our customers, stockholders and management. They possess keen intellect and the highest integrity. Most of our directors have broad technology sector experience, including expertise in semiconductor technology, innovation and strategy. Several members of our Board are current or former chief executive officers, thereby providing the Board with practical understanding of how large organizations operate, including the importance of employee development and retention. They also understand strategy and risk management and how these factors impact our operations.
Director Nominees
Director Nominees Certain information regarding each of the nominees is set forth below, including his or her experience, qualifications, attributes and skills that led the Nominating and Corporate Governance Committee and the Board to conclude that the individual should serve as a director on the Board, as well as his or her principal occupation. Each nominee’s former directorships on public company boards during the past five years are included in a table set forth below—“Former Directorships in Public Companies in the Last Five Years.” The age of each director is as of our Annual Meeting.
Director Nominees
| 8 | ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement |
Director Nominees
| Nora M. Denzel Director since March 2014 and Lead Independent Director since November 2022 Age: 61 Board Committees: Chair of Nominating and Corporate Governance Committee and Member of Innovation and Technology Committee |
Director Nominees
Ms. Denzel served as interim Chief Executive Officer of Outerwall Inc. (an automated retail solutions provider) from January to August 2015. Prior to Outerwall, Ms. Denzel held various executive management positions from February 2008 through August 2012 at Intuit Inc. (a cloud financial management software company), including Senior Vice President of Big Data, Social Design and Marketing and Senior Vice President and General Manager of the QuickBooks Employee Management business unit. From 2000 to 2006, Ms. Denzel held several executive level positions at HP Enterprise, formerly, Hewlett-Packard Company (a technology software, services and hardware provider), including Senior Vice President and General Manager, Software Global Business Unit from May 2002 to February 2006 and Vice President of Storage Organization from August 2000 to May 2002. Prior to HP Enterprise, Ms. Denzel held executive positions at Legato Systems Inc. (a data storage management software company purchased by EMC Corporation) and International Business Machines Corporation (IBM) (an information technology company). Ms. Denzel has been a member of the board of directors of Gen Digital Inc. (formerly, NortonLifelock, Inc.) since December 2019. Formerly, Ms. Denzel was a director of SUSE S.A. from May 2021 to September 2023, a director of Telefonaktiebolaget LM Ericsson from March 2013 to March 2023, and Talend SA from 2017 to 2021. She has served for over ten years on the non-profit board of AnitaB.org which is dedicated to attracting more women into technology. She is NACD Directorship Certified and holds a Master of Business Administration degree from Santa Clara University and a Bachelor of Science degree in computer science from the State University of New York. Director Qualifications: Ms. Denzel is a seasoned business executive with over 25 years of operational experience in key senior technology positions. She brings to the Board substantial experience in the areas of executive leadership, technology and software engineering. She also provides corporate governance insight from her past and present service on private and public company boards.
Director Nominees
| ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement | 9 |
Director Nominees
| Mark Durcan Director since October 2017 Age: 63 Board Committees: Chair of Compensation and Leadership Resources Committee and Member of Innovation and Technology Committee |
Director Nominees
Mr. Durcan served as an advisor of Micron Technology, Inc. (Micron Technology) (a memory and storage solutions company) from May 2017 to August 2017 and served as its Chief Executive Officer from February 2012 until his retirement in May 2017. During Mr. Durcan’s 32-year tenure at Micron Technology, he held a wide variety of senior leadership positions, including President and Chief Operating Officer from 2007 to 2012, Chief Operating Officer from 2006 to 2007, Chief Technical Officer from 1998 to 2006 and Vice President, Process Research and Development from 1996 to 1998. Mr. Durcan joined Micron Technology, in June 1984 as a Diffusion Engineer and held a series of increasingly responsible positions, including Process Integration Engineer, Process Integration Manager and Process Development Manager. Mr. Durcan holds approximately 100 U.S. patents and overseas patents. Mr. Durcan has been a member of the board of directors of Cencora (previously, AmerisourceBergen Corporation) since 2015, the Supervisory Board at ASML Holding NV, since April 2020, and the Board of Natural Intelligence Systems Inc. since 2021, a private company. He also serves as a director of St. Luke’s Medical System (a not-for-profit hospital and health care system in Idaho), and on the Board of Trustees of Rice University. Mr. Durcan served on the board of directors of Veoneer, Inc. from 2018 to April 2022. Mr. Durcan holds a Bachelor of Science degree in chemical engineering and a Master of Chemical Engineering degree from Rice University. Director Qualifications: Mr. Durcan is a seasoned business executive with more than 32 years of experience in the semiconductor industry. He brings to the Board substantial experience in the areas of executive leadership, strategic planning, finance and corporate governance.
Director Nominees
| 10 | ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement |
Director Nominees
| Michael P. Gregoire Director since November 2019 Age: 58 Board Committees: Member of Compensation and Leadership Resources Committee and Nominating and Corporate Governance Committee |
Director Nominees
Mr. Gregoire is a founding partner at Brighton Park Capital (a growth equity private equity firm). Prior to Brighton Park Capital, Mr. Gregoire served as Chairman & CEO of CA Technologies (an enterprise software company) from January 2013 to November 2018. Mr. Gregoire served as President and CEO of Taleo Corporation (Taleo) (a cloud-based talent management software company) from March 2005 to April 2012. He also served as a member of the board of directors of Taleo from April 2005 to April 2012 and as chairman of the board from May 2009 to April 2012. In addition, Mr. Gregoire served as Executive Vice President at PeopleSoft, Inc. and Executive Director at Electronic Data Systems (EDS) and has been chair of the World Economic Forum’s IT Governors Steering Committee as well as a member of the Business Roundtable’s Information and Technology Committee. Mr. Gregoire also serves on the Executive Council of TechNet (an organization of CEOs that represents the technology industry in policy issues critical to American innovation and economic competitiveness). Mr. Gregoire has been Chairman of the board of directors of Smartsheet Inc. since December 2019. He was also a member of the board of directors of Automatic Data Processing, Inc. (ADP) from 2014 to 2019. Mr. Gregoire holds a Bachelor of Science degree in physics and computing from Wilfrid Laurier University in Ontario, Canada, and a Master of Business Administration degree from California Coast University. Director Qualifications: Mr. Gregoire is a seasoned business executive with experience as a chief executive officer, with a strong financial management and fiscal background. Mr. Gregoire brings to the Board extensive experience in executive leadership and strategy in the technology industry.
Director Nominees
| ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement | 11 |
Director Nominees
| Joseph A. Householder Director since September 2014 Age: 68 Board Committees: Chair of Audit and Finance Committee and Member of Nominating and Corporate Governance Committee |
Director Nominees
Mr. Householder was the President and Chief Operating Officer of Sempra Energy (a worldwide provider of energy infrastructure and gas and electric utilities and a recognized leader in sustainability, diversity and inclusion) where he oversaw Sempra Energy’s regulated U.S. utilities and the Sempra North American Infrastructure Group from May 2018 until his retirement in January 2020. Previously from 2017 to 2018, Mr. Householder served as Sempra Energy’s Corporate Group President, Infrastructure Businesses overseeing the company’s operations in midstream, liquefied natural gas and renewable energy and Mexico. From 2011 to 2016, Mr. Householder was the Executive Vice President and Chief Financial Officer of Sempra Energy. He also served as Chief Accounting Officer of Sempra Energy from 2007 to 2012. From 2006 to 2011, Mr. Householder was Senior Vice President and Controller of Sempra Energy responsible for financial reporting, accounting and controls and tax functions for all Sempra Energy companies. Prior to this role, he served as Vice President of Corporate Tax and Chief Tax Counsel for Sempra Energy. Prior to joining Sempra Energy in 2001, Mr. Householder was a partner at PricewaterhouseCoopers in the firm’s national tax office. From 1986 to 1999, he served in a number of legal and financial roles at Unocal Corporation, including ultimately as Vice President of Corporate Development and Assistant Chief Financial Officer, where he was responsible for worldwide tax planning, financial reporting and forecasting and mergers and acquisitions. Mr. Householder is Chair of the Audit Committee and a member of the Compensation Committee of REV Renewables LLC, a private company. He is NACD Directorship Certified, has completed a CERT Certificate in Cybersecurity Oversight, and holds a Bachelor of Science degree in business administration from the University of Southern California and a Juris Doctor degree from Loyola Law School. Director Qualifications: Mr. Householder brings to the Board significant financial and operational expertise as a result of his chief financial officer experience at Sempra Energy, his experience as a partner of PricewaterhouseCoopers and his experience at Unocal Corporation.
Director Nominees
| 12 | ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement |
Director Nominees
| John W. Marren Director since February 2017 Age: 61 Board Committees: Member of Audit and Finance Committee |
Director Nominees
Mr. Marren has served as Senior Managing Director, North America of Temasek (a sovereign wealth fund of the government of Singapore) since November 2017. Prior to joining Temasek, Mr. Marren was a Senior Partner and the Head of Technology Investments of TPG Capital (a private equity investment company) from 2000 until his retirement in December 2015. From 1996 through 2000, Mr. Marren was a Managing Director at Morgan Stanley (a global financial services company), most recently as Co-Head of the Technology Investment Banking Group. From 1992 to 1996, he was a Managing Director and Senior Semiconductor Research Analyst at Alex. Brown & Sons (Alex. Brown) (an investment company). While at Morgan Stanley and Alex. Brown, Mr. Marren was a frequent member of the Institutional Investor All-American Research Team, which recognizes the top research analysts on Wall Street. Prior to Alex. Brown, Mr. Marren spent seven years in the semiconductor industry working for VLSI Technology and Vitesse Semiconductor. Mr. Marren serves as a director of Impossible Foods, Inc., a private company. He is a Trustee of the University of California, Santa Barbara, and he serves on the US Olympic and Paralympic Foundation Board. Mr. Marren served on the board of directors of Poshmark, Inc. from 2018 to 2022. Mr. Marren holds a Bachelor of Science degree in electrical engineering from the University of California, Santa Barbara. Director Qualifications: Mr. Marren brings to the Board extensive experience with financial management and technology, as well as capital market expertise as a result of his prior work at TPG Capital and Morgan Stanley. Mr. Marren also provides the Board with valuable corporate governance insight from his past and present service on private and public company boards.
Director Nominees
| ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement | 13 |
Director Nominees
| Jon A. Olson Director since February 2022 Age: 70 Board Committees: Member of Audit and Finance Committee |
Director Nominees
Mr. Olson joined the Board of AMD in February 2022. Prior to that date, Mr. Olson was a member of the Board of Xilinx, Inc. (Xilinx) from May 2020 until February 2022 when Xilinx was acquired by AMD. Mr. Olson previously served as the Chief Financial Officer of Xilinx from June 2005 until his retirement in July 2016. While serving as Chief Financial Officer, he also held a variety of other senior management positions at Xilinx, including most recently as Executive Vice President from May 2014 to July 2016 and, prior to that, Senior Vice President of Finance from August 2006 to May 2014 and Vice President of Finance from June 2005 to August 2006. Prior to joining Xilinx, Mr. Olson spent more than 25 years at Intel Corporation, serving in a variety of positions from 1979 to 2005, including Vice President of Finance and Enterprise Services and Director of Finance. Mr. Olson currently serves on each of the board of directors of Kulicke & Soffa (a supplier of semiconductor and electronic assembly solutions) and Rocket Lab USA, Inc. (a provider of launch and space systems). Mr. Olson previously served on the board of directors of Mellanox Technologies, Ltd. (Mellanox) (a supplier of computer networking products) from June 2018 until April 2020 when Mellanox was acquired by Nvidia Corporation. He also served on the board of directors of HomeUnion, Inc. (HomeUnion) (an online investment management platform dedicated to the residential real estate market) from November 2018 until November 2019 when HomeUnion was acquired by Mynd Property Management. Director Qualifications: Mr. Olson’s qualifications include his more than 30 years of experience in senior roles of financial responsibility in the semiconductor industry, together with his track record of growing profitable businesses and his experience at various semiconductor and technology companies.
Director Nominees
| 14 | ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement |
Director Nominees
| Dr. Lisa T. Su Director since October 2014 and Chair of the Board since February 2022 Age: 54 |
Director Nominees
Dr. Lisa T. Su is AMD’s Chair, President and Chief Executive Officer. She has served on AMD’s Board of Directors since October 2014 and was named Chair of the Board in February 2022. She has been AMD’s President and Chief Executive Officer since October 2014. Previously, from July 2014 to October 2014, she was Chief Operating Officer responsible for AMD’s business units, sales, and global operations teams. Dr. Su joined AMD in January 2012 as Senior Vice President and General Manager, Global Business Units and was responsible for driving end-to-end business execution of AMD products and solutions. Prior to joining AMD, Dr. Su served as Senior Vice President and General Manager, Networking and Multimedia at Freescale Semiconductor, Inc. (Freescale) (a semiconductor manufacturing company), responsible for global strategy, marketing and engineering for embedded communications and applications processor business. Dr. Su joined Freescale in 2007 as Chief Technology Officer, where she led technology roadmap and research and development efforts. Dr. Su spent the previous 13 years at IBM in various engineering and business leadership positions, including Vice President of the Semiconductor Research and Development Center responsible for the strategic direction of IBM’s silicon technologies, joint development alliances and semiconductor R&D operations. Prior to IBM, she was a member of the technical staff at Texas Instruments Incorporated from 1994 to 1995. Dr. Su has Bachelor of Science, Master of Science and Doctorate degrees in electrical engineering from the Massachusetts Institute of Technology (MIT). She has published more than 40 technical articles and was named a Fellow of the Institute of Electronics and Electrical Engineers in 2009. In 2023, Dr. Su was included in Forbes’ and Fortune’s Most Powerful Women lists and received the Distinguished Leadership Award from the Committee for Economic Development. She is a member of the American Academy of Arts & Science and is a recipient of the Grace Hopper Technical Leadership Abie Award. She holds the highest semiconductor honor, the Robert N. Noyce Medal, and in 2021 was appointed by President Biden to the President’s Council of Advisors on Science and Technology (PCAST). Dr. Su continues to serve on PCAST and is a member of the board of directors for the Semiconductor Industry Association. Director Qualifications: As our President and Chief Executive Officer, Dr. Su brings to the Board her expertise and proven leadership in the global semiconductor industry as well as valuable insight into our operations, management and culture, providing an essential link between the management and the Board on management’s perspectives.
Director Nominees
| ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement | 15 |
Director Nominees
| Abhi Y. Talwalkar Director since June 2017 Age: 60 Board Committees: Chair of Innovation and Technology Committee and Member of Compensation and Leadership Resources Committee |
Director Nominees
Mr. Talwalkar was President and Chief Executive Officer of LSI Corporation (LSI) (a semiconductor and software company) from May 2005 until the completion of LSI’s merger with Avago Technologies Limited in May 2014. From 1993 to 2005, Mr. Talwalkar held a number of senior management positions at Intel Corporation (Intel) (a semiconductor company), including Corporate Vice President and Co-General Manager of the Digital Enterprise Group, which was comprised of Intel’s corporate client, server, storage, and communications businesses, and Vice President and General Manager for the Intel Enterprise Platform Group, where he focused on developing, marketing, and driving Intel business strategies for server computing. Prior to Intel, Mr. Talwalkar held senior engineering and marketing positions at Sequent Computer Systems (a multiprocessing computer systems design and manufacturer that later became a part of IBM). He also held positions at Bipolar Integrated Technology, Inc. (a VLSI bipolar semiconductor company); and Lattice Semiconductor Inc. (a service-driven developer of programmable design solutions). Mr. Talwalkar has been Chair of the board of directors of Lam Research Corporation since 2019, iRhythm Technologies since 2016, and a board member of TE Connectivity since 2017. Mr. Talwalkar was also a member of the board of directors of LSI from 2005 to 2014 and the Semiconductor Industry Association. Additionally, he was a member of the U.S. delegation for World Semiconductor Council proceedings. Mr. Talwalkar holds a Bachelor of Science degree in electrical engineering from Oregon State University. Director Qualifications: Mr. Talwalkar brings to the Board extensive CEO experience and significant public company technology industry experience. He also provides the Board with valuable public board governance insight from his past and present board service.
Director Nominees
| 16 | ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement |
Director Nominees
| Elizabeth W. Vanderslice Director since February 2022 Age: 60 Board Committees: Member of Compensation and Leadership Resources Committee and Nominating and Corporate Governance Committee |
Director Nominees
Ms. Vanderslice has served as a partner at Trewstar Corporate Board Services, a firm specializing in corporate board placements, since February 2019. She served on the board of Xilinx, Inc. from December 2000 through its acquisition by AMD in February 2022. Ms. Vanderslice also serves on the boards of AESC Group Ltd. (a private EV battery technology company), and Univers Holdings (a private global provider of energy and carbon management technology solutions and services company). From 1999 to 2001, Ms. Vanderslice served as a general manager of Lycos, Inc. (Lycos) through its acquisition. From 1996 to 1999, Ms. Vanderslice was CEO of Wired Digital, Inc. (Wired Digital), a spin-off of Wired Ventures, Inc. (Wired Ventures), and a member of the boards of both Wired Digital and Wired Ventures before leading the company’s acquisition by Lycos. Prior to joining Wired Digital in early 1995, Ms. Vanderslice served as a principal in the investment banking firm Sterling Payot Company, which raised the capital to launch Wired Magazine. She was also a Vice President at H.W. Jesse & Co. (a San Francisco investment banking firm). In addition, she worked for the IBM Corporation from 1986-1990. Ms. Vanderslice holds a Masters of Business Administration from the Harvard Business School and a Bachelor of Science degree in computer science from Boston College. She is an Aspen Institute Henry Crown Fellow and was a member of the Young Presidents’ Organization and the World Presidents’ Organization. Ms. Vanderslice has also served as a Trustee of Boston College since 2010. Director Qualifications: Ms. Vanderslice brings over 25 years of board and general management experience in the technology industry, including 21 years as a member of the Xilinx board, CEO of an internet company, and a background in computer science and systems engineering.
Director Nominees
| ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement | 17 |
Board Diversity Matrix
Board Diversity Matrix Annually, we look at and assess the composition of our Board across a broad range of criteria, including, but not limited to, industry and geographic experience, skills, education, and diversity. The demographic information presented below is based on voluntary self-identification by each director nominee.
Board Diversity Matrix
| Identity | Denzel | Durcan | Gregoire | Householder | Marren | Olson | Su | Talwalkar | Vanderslice | | Gender Expression | | | | | | | | | | | Male | | ✓ | ✓ | ✓ | ✓ | ✓ | | ✓ | | | Female | ✓ | | | | | | ✓ | | ✓ | | Demographic Identity | | | | | | | | | | | African American or Black | | | | | | | | | | | Alaskan Native or Native American | | | | | | | | | | | Asian | | | | | | | ✓ | ✓ | | | Hispanic or Latinx | | | | | | | | | | | Native Hawaiian or Pacific Islander | | | | | | | | | | | White | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | | ✓ | | Two or More Races or Ethnicities | | | | | | | | | | | LGBTQ+ | | | | | | | | | | | Undisclosed | | | | | | | | | |
Board Diversity Matrix
Directors who Identify as Middle Eastern: 2
Former Directorships in Public Companies in the Last Five Years
Former Directorships in Public Companies in the Last Five Years The table below sets forth the list of public companies on which our director nominees formerly served over the last five years including the name of the company and duration of service. Our director nominees do not currently serve on the boards of the companies listed below.
Former Directorships in Public Companies in the Last Five Years
| Director | Name of the Company | Term of Past Directorship | | Nora M. Denzel | Telefonaktiebolaget LM Ericsson | 2013—2023 | | | Talend SA | 2017—2021 | | | SUSE S.A. | 2021—2023 | | Mark Durcan | Veoneer, Inc. | 2018—2022 | | Michael P. Gregoire | CA Technologies | 2013—2018 | | | Automatic Data Processing, Inc. | 2014—2019 | | Joseph A. Householder | Infraestructura Energetica Nova, S.A.B. de C.V. | 2013—2020 | | John W. Marren | Poshmark, Inc. | 2018—2022 | | Jon A. Olson | Mellanox Technologies, Ltd. | 2018—2020 | | | Xilinx, Inc. | 2020—2022 | | Lisa T. Su | Analog Devices, Inc. | 2012—2020 | | | Cisco Systems, Inc. | 2020—2023 | | Elizabeth W. Vanderslice | Xilinx, Inc. | 2000—2022 |
Former Directorships in Public Companies in the Last Five Years
| 18 | ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement |
Consideration of Stockholder Nominees for Director
Consideration of Stockholder Nominees for Director The policy of the Nominating and Corporate Governance Committee is to consider properly submitted stockholder nominations for candidates to serve on the Board. Pursuant to our bylaws, stockholders who wish to nominate persons for election to the Board at our 2025 annual meeting of stockholders must (i) be a stockholder of record, both when they give us notice and at our 2025 annual meeting, (ii) be entitled to vote at our 2025 annual meeting and (iii) comply with the notice provisions in our bylaws. A stockholder’s notice must be delivered to our Corporate Secretary not less than 90 days nor more than 120 days before the anniversary date of the immediately preceding annual meeting. For our 2025 annual meeting of stockholders, the notice must be delivered between January 8, 2025 and February 7, 2025. However, if our 2025 annual meeting of stockholders is not held within 30 days of May 8, 2025, the stockholder’s notice must be delivered no later than the close of business on the tenth day following the earlier of the day on which the first public announcement of the date of our 2025 annual meeting was made or the day the notice of our 2025 annual meeting is mailed. The public announcement of an adjournment or postponement of our 2025 annual meeting of stockholders will not trigger a new time period (or extend any time period) for the giving of a stockholder notice as described in this proxy statement. Notwithstanding the foregoing, if the number of directors to be elected to the Board at an annual meeting is increased and we do not make a public announcement naming all of the nominees for director or specifying the size of the increased Board at least 100 days prior to the first anniversary of the preceding year’s annual meeting, the stockholder’s notice will be considered timely, but only with respect to nominees for any new positions created by the increase, if it is delivered to our Corporate Secretary not later than the close of business on the tenth day following the day on which we first make such public announcement. The Chair of our Annual Meeting will determine if the procedures in the bylaws have been followed, and if not, declare that the nomination be disregarded. If the nomination was made in accordance with the procedures in our bylaws, the Nominating and Corporate Governance Committee will apply the same criteria in evaluating the nominee as it would any other Board nominee candidate and will recommend to the Board whether or not the stockholder nominee should be nominated by the Board and included in our proxy statement. These criteria are described below in the description of the Nominating and Corporate Governance Committee in the section entitled “Meetings and Committees of the Board of Directors—Board Committees.” The nominee must be willing to provide a written questionnaire, representation and agreement, if requested by us, and any other information reasonably requested by us in connection with our evaluation of the nominee’s independence. In addition, our bylaws permit certain of our stockholders who have beneficially owned 3% or more of our outstanding common stock continuously for at least three years to submit nominations to be included in our proxy materials for up to 20% of the total number of directors then serving, provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the bylaws. Notice of proxy access director nominations must be delivered to our principal executive offices at Advanced Micro Devices, Inc., 2485 Augustine Drive, Santa Clara, California 95054, Attention: Corporate Secretary, no earlier than 150 days or no later than 120 days prior to the first anniversary of the date the proxy materials were released in connection with the preceding year’s annual meeting. For our 2025 annual meeting of stockholders, the notice must be delivered between October 23, 2024, and no later than the close of business on November 22, 2024. In addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act.
DIRECTORS’ COMPENSATION AND BENEFITS
| Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2)(3) ($) | Total ($) | | Nora M. Denzel | 206,805 | 292,382 | 499,187 | | Mark Durcan | 155,000 | 292,382 | 447,382 | | Michael P. Gregoire | 130,000 | 292,382 | 422,382 | | Joseph A. Householder | 155,000 | 292,382 | 447,382 | | John W. Marren | 121,173 | 292,382 | 413,555 | | Jon A. Olson | 120,000 | 292,382 | 412,382 | | Abhi Y. Talwalkar | 156,760 | 292,382 | 449,142 | | Elizabeth W. Vanderslice | 132,347 | 292,382 | 424,729 |
Leadership Changes
Pursuant to her offer letter, which was negotiated at arms-length, Ms. Hu’s initial base salary is $725,000, she is eligible for an annual performance bonus target amount of 125% of her base salary under our Executive Incentive Plan (our “EIP”), and we recommended to the Compensation Committee that she receive a long-term equity incentive award for the 2023 fiscal year with a target value of $7.5 million subject to similar vesting and other terms and conditions as the annual long-term incentive awards granted to our other executive team members. Ms. Hu also received a sign-on equity award of a target number of performance-based restricted stock units (“PRSUs”) having an aggregate intended target value of $5 million (or a target number of 65,971 PRSUs) that may be earned (0% to 250% of target) depending on (a) the return on AMD’s stock price relative to the return on the S&P 500 Index over the three-year performance period that begins February 15, 2023 and ends on February 15, 2026, (b) the absolute return on AMD’s stock price over the performance period, and (c) the percentage (if any) by which AMD’s 2024 fiscal year non-GAAP earnings per share exceeds AMDs 2022 fiscal year target non-GAAP earnings per share. Ms. Hu’s sign-on PRSUs, to the extent earned, are scheduled to vest on February 15, 2026, generally subject to her continued service through such date and Compensation Committee certification of final performance results. Ms. Hu’s “make whole” compensation was comprised of (a) time-based restricted stock units (“RSUs”) having an aggregate intended target value of $5 million (65,971 time-based RSUs) that are scheduled to vest on February 15, 2024, generally subject to her continued service through such date, (b) time-based RSUs that having an aggregate intended target value of $7 million (or 92,360 time-based RSUs) that are scheduled to vest one-third each on February 15, 2024, February 15, 2025, and February 15, 2026, generally subject to her continued service through each such vesting date, and (c) a sign-on cash bonus of $2 million. Ms. Hu is required to repay the sign-on cash bonus in full if her employment terminates within the first thirteen months following her start date, or, if her employment terminates after thirteen months and before the 24th month following her start date, her repayment obligation is prorated based on each full month of employment following her thirteenth month of employment. Ms. Hu’s sign-on and make-whole equity awards are subject to the terms and conditions of the 2004 Equity Incentive Plan (“2004 Plan”). 2023 Chief Commercial Officer New Hire Package On June 5, 2023, Mr. Guido was appointed as our new Chief Commercial Officer. We entered into an offer letter with Mr. Guido on April 4, 2023, regarding his employment and compensation. Advised by Compensia, the Compensation Committee sought to ensure that Mr. Guido’s annual compensation package was market competitive for an experienced Chief Commercial Officer in our industry and also included certain “make-whole” compensation intended to be economically equivalent to compensation he forfeited upon his departure from his prior employer. Pursuant to his offer letter, which was negotiated at arms-length, Mr. Guido’s initial base salary is $725,000, and he is eligible for an annual performance bonus target amount of 125% of his base salary under the EIP. Mr. Guido also received a sign-on equity award having an aggregate intended target value of $5 million, which was converted into 50% PRSUs and 50% time-based RSUs. As a result, on June 15, 2023, Mr. Guido received (a) a PRSU award for a target number of 22,482 PRSUs that has the same performance- and service-vesting conditions as Ms. Hu’s sign-on PRSU award (as described above), and (b) an award of 22,482 time-based RSUs that are scheduled to vest one-third each on June 15, 2024, June 15, 2025, and June 15, 2026, generally subject to Mr. Guido’s continued service through each such vesting date. Mr. Guido’s “make whole” compensation was comprised of (a) time-based RSUs having a target value of $4 million (35,971 time-based RSUs) that are scheduled to vest on June 15, 2024, generally subject to his continued service through such date, and (b) a sign-on cash bonus of $3 million. Mr. Guido is required to repay the sign-on cash bonus in full if his employment terminates within the first thirteen months following his start date, or, if his employment terminates after thirteen months and before the 24th month following his start date, his repayment obligation is prorated based on each full month of employment following his thirteenth month of employment. Mr. Guido’s sign-on and make-whole equity awards are subject to the terms and conditions of the 2023 Plan. 2023 Executive Vice President Promotion Effective January 2, 2023, Mr. Norrod was promoted to Executive Vice President and General Manager, Data Center Solutions Unit. Prior to that promotion, Mr. Norrod served as our Senior Vice President and General Manager, Data Center Solutions Group. In connection with Mr. Norrod’s promotion to Executive Vice President and General
Leadership Changes
Manager, Data Center Solutions Group, the Compensation Committee approved an increase to Mr. Norrod’s base salary to $680,000 (from $640,000) and increased his target bonus opportunity under our EIP to 125% of base salary (from 100% of base salary), each effective January 2, 2023. In contemplation of Mr. Norrod’s pending promotion, in December 2022 the Compensation Committee approved the grant, on February 15, 2023, of a promotion retention equity award to Mr. Norrod having an aggregate intended target value of $5 million. The award’s aggregate intended target value was converted into a mix of 50% PRSUs and 50% time-based RSUs. Accordingly, Mr. Norrod received a PRSU award covering a target number of 32,985 PRSUs and an award of 32,985 time-based RSUs. Mr. Norrod’s promotion retention equity award was designed by the Compensation Committee to reflect his increased responsibilities upon promotion as our Executive Vice President and General Manager, Data Center Solutions Group, and to promote his retention by providing Mr. Norrod with market competitive incentive compensation that aligns with stockholders’ interests. The number of PRSUs that may be earned by Mr. Norrod pursuant to the PRSU award is based on five-year compound annual growth rate milestones related to our closing stock price that may be attained within the performance period that begins on February 15, 2023 and ends on February 15, 2026, with potential payouts at 0%, 75%, 100%, 125%, 150%, 175% and 200% of the target number of PRSUs. Any PRSUs that become earned on or before February 15, 2026, are scheduled to vest 100% on February 15, 2026, generally subject to Mr. Norrod’s continued employment through such date and Compensation Committee certification of performance results. The time-based RSUs are scheduled to vest as to one-third of the underlying shares on each of February 15, 2024, February 15, 2025, and February 15, 2026, subject to Mr. Norrod’s continued employment with us through each vesting date.
2023 Executive Compensation Program – Highlights
| • | Rewards our Named Executive Officers for superior financial and operational results through our EIP, a short-term cash incentive program that puts a substantial component of pay at risk, with payouts tied to achievement of carefully selected and calibrated financial performance objectives and strategic milestones; and |
2023 Executive Compensation Program – Highlights
| • | Aligns our Named Executive Officers’ interests with those of our stockholders through long-term equity-based awards, including PRSUs tied to relative market stock price performance and achievement of ambitious earnings growth targets. |
2023 Executive Compensation Program – Highlights
| • | Long-term equity awards (the ultimate value of which depend on our stock price) continued to be the largest element of compensation, representing approximately 87% of our Chief Executive Officer’s target total direct compensation and approximately 81% of the average target total direct compensation of our other Named Executive Officers (excluding Mr. Kumar); and |
2023 Executive Compensation Program – Highlights
| • | 100% of the target annual incentive bonuses payable to our Named Executive Officers (excluding Mr. Kumar) was tied to the achievement of pre-established financial and strategic milestone goals for the 2023 fiscal year that aligned with our annual operating plan. |
2023 Executive Compensation Program – Highlights
As used herein, a Named Executive Officer’s “target total direct compensation” is the sum of his or her base salary, target annual incentive bonus opportunity under our EIP, and the aggregate intended target value of long-term equity awards granted under our equity plans in fiscal 2023 (but excluding, for Mr. Norrod, his promotion retention equity award, and, for Ms. Hu and Mr. Guido, their “make-whole” equity awards, “make-whole” cash bonuses, and sign-on equity awards). The aggregate intended target values of our long-term equity awards differ from the accounting values (grant date fair value) that are included in the “2023 Summary Compensation Table” and “Grants of Plan-Based Awards in 2023” tables below on pages 69 and 73).
Executive Compensation Policies and Practices
| Policy/Practice | Summary | | Clawback/Recovery Rights | In November 2023, we adopted a compensation recovery (“clawback”) policy in compliance with the listing standards of Nasdaq pursuant to which we are required to recover certain incentive-based compensation received by our executive officers as a result of achieving financial performance goals that are not met under any restated financial results. In addition, we have the right to recoup incentive-based and other compensation (including both time and performance-based equity awards) paid or granted to an employee (including any Named Executive Officer) in the event of certain misconduct by the employee (see our “Compensation Recovery (“Clawback”) Rights” section below). | | One-year minimum vesting period for equity awards | Our equity plans (i.e., our 2023 Plan, 2004 Plan, and the Xilinx 2007 Plan) require a minimum one-year vesting period with respect to at least 95% of awards issued thereunder, subject to limited exceptions such as death, disability, termination of employment or a change of control of AMD. | | Change of control payments are “double-trigger” and capped | Our change of control agreements are “double-trigger”, meaning payments will be made only if there is an involuntary termination of employment without cause or constructive discharge following a change of control. Further, since March 2010 we have not and will not enter into change of control agreements that provide cash change of control payments that exceed (i) two times the sum of base salary and target annual incentive bonus plus (ii) the pro-rated target annual incentive bonus for the year in which the termination of employment occurs. | | No new excise tax gross-ups | Since April 2009, we have not and will not enter into any change of control agreement or arrangement with a Named Executive Officer that provides for an excise tax gross-up payment. | | Limited perquisites | We provide limited perquisites or other personal benefits to our Named Executive Officers and generally provide air and other travel for our Named Executive Officers for business purposes only. Our policy provides for the use of the Company aircraft by our Chief Executive Officer for business flights. Our other Named Executive Officers may use the Company aircraft for approved business flights when a commercial flight would not be more feasible or practical. | | Anti-hedging and pledging policy | We prohibit our employees (including our Named Executive Officers and Directors) from hedging AMD securities. Pledging of AMD securities is not permitted without the preapproval of the Nominating and Governance Committee of our Board which is only granted in very limited circumstances. None of our Named Executive Officers or Directors currently have pledged any shares. | | Incentive compensation amounts are subject to payment thresholds and maximums | Our annual cash performance bonuses and 2023 annual PRSU awards have aggressive and challenging performance requirements that must be achieved to receive target payment and are subject to maximum potential payment in relation to the target award. | | Stock ownership requirements | We have robust stock ownership requirements for our Chief Executive Officer and other Named Executive Officers. | | Compensation risk assessment | The Compensation Committee conducts an annual risk assessment of our compensation policies and practices to ensure that our programs are not reasonably likely to have a material adverse effect on us. |
Competitive Compensation
Competitive Compensation We operate in a highly competitive business environment; therefore, it is imperative that we recruit and retain top leadership and industry experts to guide and execute our business strategy. This requires that we offer competitive compensation. Accordingly, the Compensation Committee seeks to compensate our Named Executive Officers at competitive levels with compensation for executives in similar positions at a group of peer companies (set
Competitive Compensation
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Competitive Compensation
forth below), which the Compensation Committee believes reflects the current competitive market for executive talent. In making its compensation decisions, the Compensation Committee also considers a number of other factors, including the scope of responsibility of each Named Executive Officer, internal pay comparisons and the retention value of each Named Executive Officer’s unvested long-term equity award holdings, as well as its assessment of each Named Executive Officer’s performance and expected future contributions and impact on the organization.
Align Pay Practices with Sound Risk Management
| Sound Risk Management | | | ✓ | Compensation is an appropriate balance of fixed pay versus variable pay, as well as short-term versus long-term incentives | | ✓ | Performance-based compensation opportunities are capped | | ✓ | Our annual incentive plans include multiple company-wide financial and strategic goals that are quantitative and measurable | | ✓ | Long-term equity awards are a balanced mix of time-based and performance-based vesting, both spanning multiple years | | ✓ | Long-term equity awards generally have a minimum vesting period of one year | | ✓ | Compensation is subject to recoupment (i.e., clawback) policies and provisions | | ✓ | Our Named Executive Officers are subject to rigorous stock ownership requirements |
How We Make Compensation Decisions
| • | reviewing and approving the performance goals and objectives that relate to performance-based compensation awarded under the EIP and our equity plans; |
How We Make Compensation Decisions
| • | reviewing and approving any changes to a Named Executive Officer’s total compensation package, such as base salary, annual incentive bonus opportunities, annual long-term incentive award opportunities, and payouts and retention programs. |
How We Make Compensation Decisions
| • | the competitiveness of our executive compensation program by providing a market review of executive compensation and relevant trends, evaluating our compensation peer group composition and analyzing the compensation at our compensation peer group companies; |
How We Make Compensation Decisions
| • | our executive compensation program design, including short-term and long-term incentive plan design and pay mix, the framework for our long-term equity awards and our retention strategies, evaluation of our stock ownership guidelines, and assessment of severance and change of control arrangements; |
How We Make Compensation Decisions
| • | the effectiveness of our Employee Stock Purchase Plan by benchmarking the salient provisions of similar plans within our compensation peer group; and |
How We Make Compensation Decisions
Methodology Used to Perform the Competitive Pay Analysis To assist the Compensation Committee in its review of the 2022 compensation for our Named Executive Officers, Compensia provided a competitive pay analysis in February 2022 that set forth compensation data developed from publicly available information, as of December 2021, of the companies included in a custom peer group (the “2022 Executive Compensation Peer Group”). In May 2022, Compensia provided the Compensation Committee an updated competitive pay analysis that reflected AMD’s and peer group financial data as of April 14, 2022, and updated AMD’s 30-day average stock price as of that date. To develop the 2022 Executive Compensation Peer Group, the Compensation Committee reviewed the group of companies comprising the then-existing compensation peer group in November 2021, with particular reference to their industry (i.e., business segment and key competitors), revenues (generally 50% to 200% of our revenues for the trailing four fiscal quarters) and market capitalization (generally 30% to 300% of our market capitalization), in each case based on publicly available information as of October 26, 2021. The Compensation Committee selected these latter two metrics because, based on Compensia’s analysis and holding all other factors constant, revenue has the greatest correlation to cash compensation levels and market capitalization has the greatest influence on equity compensation levels. Based on this review, the Compensation Committee removed Skyworks Solutions, Inc. because it was below the target range for both revenue and market capitalization, and removed Xilinx, Inc. because it was below the target range for revenue, at the lower end of the target range for market capitalization, and was then pending acquisition by AMD (which was subsequently completed on February 14, 2022). Also based on this review, and in order to improve the statistical sampling of the peer group, the Compensation Committee added Adobe Inc. and Intuit Inc., each of which fit within the applicable criteria and is included in competitive benchmark sets for other high profile semiconductor companies. Our revenues for the trailing four fiscal quarters ended December 25, 2021, would have placed us in approximately the 52nd percentile of the 2022 Executive Compensation Peer Group based on publicly available information. The Compensation Committee believes that the composition of the 2022 Executive Compensation Peer Group reflects an appropriate set of comparator companies for purposes of assessing our executive compensation program. The Compensation Committee used the 2022 Executive Compensation Peer Group competitive pay analysis developed by Compensia as its reference source in analyzing the competitiveness of our Named Executive Officers’ compensation. As compared to the 2022 Executive Compensation Peer Group, AMD’s fiscal 2022 and fiscal 2021 annual revenue was approximately $23.6 billion and $16.4 billion, respectively. To assist the Compensation Committee in its review of the 2023 compensation for our Named Executive Officers, Compensia provided a competitive pay analysis in February 2023 that set forth compensation data developed from publicly available information, as of December 2022, of the companies included in a custom peer group (the “2023 Executive Compensation Peer Group”). In May 2023, Compensia provided the Compensation Committee an updated competitive pay analysis that reflected AMD’s and peer group financial data as of May 2, 2023, and updated AMD’s 30-day average stock price as of that date. To develop the 2023 Executive Compensation Peer Group, the Compensation Committee reviewed the group of companies comprising the then-existing compensation peer group in November 2022, with particular reference to their industry (i.e., business segment and key competitors), revenues (generally 50% to 200% of our revenues for the trailing four fiscal quarters) and market capitalization (generally 30% to 300% of our market capitalization), in each case based on publicly available information as of October 19, 2022. The Compensation Committee selected these latter two metrics because, based on Compensia’s analysis and holding all other factors constant, revenue has the greatest correlation to cash compensation levels and market capitalization has the greatest influence on equity compensation levels. Based on this review, the Compensation Committee decided to retain the composition of the 2022 Executive Compensation Peer Group and, to increase the robustness of peer group size and align AMD closer to median for revenue and market capitalization, to add Cisco Systems, Inc., Oracle Corporation, and Salesforce, Inc. to the 2023 Executive Compensation Peer Group. Each of these three companies is included in competitive benchmark sets for other high profile semiconductor companies and satisfied the revenue and/or market capitalization criteria based on publicly available information as of October 19, 2022.
How We Make Compensation Decisions
| Peer Companies | | | Adobe Inc. | Microchip Technology Incorporated | | Analog Devices, Inc. | Micron Technology, Inc. | | Applied Materials, Inc. | Motorola Solutions, Inc. | | Broadcom Inc. | NXP Semiconductors N.V. | | Cisco Systems, Inc. | NVIDIA Corporation | | Intel Corporation | Oracle Corporation | | Intuit Inc. | Qualcomm Inc. | | KLA Corporation | Salesforce, Inc. | | L3Harris Technologies, Inc. | Texas Instruments Incorporated | | Lam Research Corporation | VMware, Inc. | | Marvell Technology Group Ltd. | |
How We Make Compensation Decisions
Our revenues for the trailing four fiscal quarters ended September 24, 2022, would have placed us in approximately the 57th percentile of the 2023 Executive Compensation Peer Group based on publicly available information. Our market capitalization would have placed us in approximately the 55th percentile of the 2023 Executive Compensation Peer Group, based on the 30-day average market capitalization of AMD and each peer group company as of October 19, 2022. The following illustrates how our revenue and market capitalization as of October 19, 2022 compared to the median of the 2023 Executive Compensation Peer Group:
How We Make Compensation Decisions
| | Revenue | Market Capitalization | | Peer Group Median | $17.2 billion | $74.8 billion | | AMD | $21.6 billion | $110.0 billion |
How We Make Compensation Decisions
The Compensation Committee believes that the composition of the 2023 Executive Compensation Peer Group reflects an appropriate set of comparator companies for purposes of assessing our executive compensation program. The Compensation Committee used the 2023 Executive Compensation Peer Group competitive pay analysis developed by Compensia as its reference source in analyzing the competitiveness of our Named Executive Officers’ compensation.
Fiscal 2023 Compensation Elements
| Element | | Description | Objective | Factors Influencing Amount | | Base Salary | | Fixed compensation delivered in cash; reviewed annually and adjusted if appropriate | Provides base amount of market competitive pay | Experience, market data, individual role and responsibilities, and individual performance | | Annual Cash Performance Bonus (EIP Awards) | | Variable cash compensation based on performance against annual financial goals (weighted 80%) and strategic milestones (weighted 20%), subject to Compensation Committee discretion to increase or decrease the amount of the bonus | Motivates and rewards achievement of key financial results tied to our annual operating plan | Annual target cash performance bonus opportunity determined annually as a percentage of base salary based on the executive’s experience, individual role and responsibilities, and individual performance, and market data | | Long-Term Incentive Plan Awards (LTI Awards) | Performance- Based Restricted Stock Units (PRSUs) | Variable compensation with payout in shares based on (i) stock price performance (absolute and relative to the performance of the S&P 500 Index) over a three-year performance period, and (ii) AMD’s non-GAAP EPS growth from 2023 through 2025 | Directly aligns interests of executives with long-term stockholder value creation by linking potential payouts to relative and absolute stock price performance and EPS; promotes retention | Intended target value of all LTI Awards is based on market data and individual role and responsibilities | | | Stock Options | Variable compensation based on increase in stock price from date of grant, subject to exercise of the stock option and time-based vesting; awards vest pro rata annually over four years and have a seven-year term | Directly aligns interests of executives with long-term stockholder value creation, provides upside potential over a seven-year option term and promotes retention | | | | Restricted Stock Units (RSUs) | Variable compensation with payout in shares subject to time-based vesting; awards generally vest pro rata annually over four years | Directly aligns interests of executives with long-term stockholder value creation and promotes retention | |
Annual Cash Performance Bonuses
Annual Cash Performance Bonuses Generally, short-term incentives in the form of an annual cash performance bonus are provided to our Named Executive Officers under the EIP. These bonuses are designed to reward short-term performance and the achievement of the principal goals of our annual operating plan. Each Named Executive Officers’ target bonus opportunity is a percentage of their base salary and is determined based on the competitive pay analysis conducted by the Compensation Committee as described above. For fiscal 2023, the target bonus opportunity was 200% of base salary for our CEO, which was unchanged from fiscal 2022, and 125% of base salary for the other Named Executive Officers, which was unchanged from fiscal 2022 for Messrs. Peng and Kumar. Mr. Kumar retired from AMD in April 2023 and did not receive a bonus under the EIP for fiscal 2023. In connection with Mr. Norrod’s promotion to Executive Vice President and General Manager, Data Center Solutions Group, the Compensation Committee increased his target bonus opportunity to 125% of base salary (from 100% of base salary) effective January 2, 2023. Ms. Hu and Mr. Guido joined AMD in January 23, 2023, and June 5, 2023, respectively, and their target bonus opportunities under the EIP for fiscal 2023 were set at 125% of base salary pursuant to the terms of their individually negotiated offer letters, prorated for the portion of calendar 2023 commencing on their start dates. Under the fiscal 2023 EIP, the amount of the annual cash performance bonus for each Named Executive Officer, other than Mr. Kumar, was calculated based on (i) his or her target bonus opportunity, (ii) our corporate financial performance (weighted 80%) for fiscal 2023, as measured against pre-established performance levels (the “Financial Performance Targets”) for the first half of fiscal 2023 (weighted 40%) and the second half of fiscal 2023
Annual Cash Performance Bonuses
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Annual Cash Performance Bonuses
(weighted 60%),and (iii) achievement of strategic milestones (weighted 20%) established with respect to key engineering, business, commercial/operational, and sales and culture metrics (the “Strategic Milestones”). Financial Performance Targets for the first half of fiscal 2023 and the Strategic Milestones were approved by the Compensation Committee in February 2023. The Financial Performance Targets for the second half of fiscal 2023 were approved by the Compensation Committee in August 2023. In addition to assessing achievement of the fiscal 2023 performance goals, the Compensation Committee also performs an annual qualitative assessment of each NEO’s individual performance. This assessment results in determination of an individual performance factor for each named executive that can increase or decrease his or her final EIP payout. Financial Performance Targets The Compensation Committee used the following financial performance measures and weightings as the Financial Performance Targets for the fiscal 2023 EIP:
Annual Cash Performance Bonuses
| Financial Measure | Weighting | | Adjusted Non-GAAP Net Income | 50% | | Net Revenue | 40% | | Adjusted Free Cash Flow | 10% |
Annual Cash Performance Bonuses
The Compensation Committee chose adjusted non-GAAP net income as a performance measure because it is a fair measure of our profitability and a valid metric for comparison, which the Compensation Committee believes is directly tied to enhanced stock price performance. The Compensation Committee assigned it a weight of 50% because it is a key short-term financial measure for the operation of our business and is a measure of significant importance to our stockholders. For purposes of the fiscal 2023 EIP, our “adjusted non-GAAP net income” was calculated by adjusting our fiscal 2023 GAAP net income for (i) non-GAAP financial adjustments such as gains/losses on equity investments (net), stock-based compensation, equity income in investee, acquisition-related and other costs, amortization of acquisition-related intangibles and provision for income taxes associated with these adjustments and (ii) amounts accrued for fiscal 2023 annual cash performance bonuses. GAAP reconciliation of our adjusted non-GAAP net income may be found in our Form 10-K filed January 31, 2024. The Compensation Committee chose GAAP net revenue as a performance measure because it reflects our top-line growth, which the Compensation Committee believes is a strong indicator of our long-term ability to increase profitability, cash flow and improve stock price performance. Finally, the Compensation Committee chose adjusted free cash flow as a performance measure because it believes effective cash management and cash generation are key components of our strategy and our annual operating plan, the successful execution of which should lower indebtedness, increase financial flexibility and ultimately drive improved company valuation and stock price performance. For purposes of the fiscal 2023 EIP, our “adjusted free cash flow” was calculated by adjusting our GAAP net cash provided by operating activities for (i) purchases of property and equipment and (ii) cash payments for fiscal 2022 bonuses which were paid in March and April 2023.
Annual Cash Performance Bonuses
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Annual Cash Performance Bonuses
The following illustrates how the 2023 annual cash performance bonuses under the EIP were calculated: The performance levels (threshold, target and maximum) for the first half and second half of fiscal 2023 financial performance measures were established by the Compensation Committee in February 2023 and August 2023, respectively, in each case in consultation with senior management. The performance levels were structured using our 2023 operating plan as a benchmark to align with our financial objectives for the fiscal periods, taking into account overall affordability of the bonus opportunities provided under the EIP for fiscal 2023. These targets were determined by the Compensation Committee to be appropriately aggressive. The threshold and maximum levels for each financial measure was determined by the Compensation Committee to provide for appropriate payout above or below target. For each performance measure, the level of performance required increases at a fixed rate between each performance level.
Annual Cash Performance Bonuses
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Annual Cash Performance Bonuses
Strategic Milestones For the Strategic Milestones, which account for 20% of the EIP Performance Factor (subject to possible adjustment as described above), the Compensation Committee selected (a) new product tape outs and launches tied to specified internal targeted delivery dates, (b) achievement of various commercial/operations milestones, and (c) workforce strategic objectives. Each of the specific Strategic Milestones is highly confidential information so we try to balance that with giving our stockholders transparency. Providing our specific milestones would give competitors a greater sense of our internal goals, milestones, strategy, and timelines. Disclosure would allow our competitors to adjust their own strategy in a way that would cause us irreparable competitive harm in the highly competitive semiconductor industry. When approved, the Compensation Committee believed that each Strategic Milestone was challenging, yet reasonably achievable. Based on our performance relative to the Financial Performance Targets and Strategic Milestones, the fiscal 2023 EIP reached 59.7% achievement. Individual Performance Factor For fiscal 2023, the Compensation Committee reviewed individual performance based on achievement of objective measures and goals in the areas of execution, leadership, and innovation/strategic planning (the “Individual Performance Factor”). At the end of fiscal 2023, our Chief Executive Officer assessed each Named Executive Officer’s performance, except her own, and made bonus recommendations to the Compensation Committee for each of them. The Compensation Committee then considered the Chief Executive Officer’s individual performance reviews and bonus recommendations, and independently assessed the Company’s performance and the individual performance of the Chief Executive Officer and each of the other Named Executive Officers to determine the Individual Performance Factor. After consideration of the factors above, the Compensation Committee determined to award each Named Executive Officer an Individual Performance Factor of 1.0 to reflect the leadership and continued execution that contributed to the Company delivering strong performance across all businesses, including record annual revenue in 2023. Based on its assessment of each of these factors and considering the Company’s strong performance relative to our aggressive Financial Performance Targets and Strategic Milestones and the challenging macro environment, the Compensation Committee approved fiscal 2023 annual cash performance bonuses under the EIP for the Named Executive Officers as set forth below:
Annual Cash Performance Bonuses
| | 2023 EIP Bonus Calculation | | | | | | Named Executive Officer | Eligible Base Salary | Target Bonus Opportunity | EIP Performance Factor | Individual Performance Factor | EIP Bonus(1) | | Lisa Su | $1,200,000 | 200% | | 1.0 | $1,432,800 | | Jean Hu(2) | $680,694 | 125% | | 1.0 | $507,968 | | Victor Peng | $915,000 | 125% | 59.7% | 1.0 | $682,819 | | Philip Guido(3) | $414,286 | 125% | | 1.0 | $309,161 | | Forrest Norrod | $695,000 | 125% | | 1.0 | $518,644 |
Annual Cash Performance Bonuses
| (1) The amounts reported in this column reflect the bonus amounts approved by the Compensation Committee and paid to the Named Executive Officers. |
Annual Cash Performance Bonuses
| (2) Ms. Hu commenced participation in the EIP effective January 23, 2023. Her eligible base salary during calendar 2023 was prorated from January 23, 2023. |
Annual Cash Performance Bonuses
| (3) Mr. Guido commenced participation in the EIP effective June 5, 2023. His eligible base salary during calendar 2023 was prorated from June 5, 2023. |
Annual Cash Performance Bonuses
The Compensation Committee reviews and certifies the level of achievement for each performance measure before any payments are made. This review and certification are generally performed at the first regularly scheduled Compensation Committee meeting following the end of the year with any payout of the annual cash performance bonus occurring in March of such year.
Long-Term Equity Awards
Long-Term Equity Awards We believe that long-term incentive compensation in the form of equity awards provide a strong alignment between the interests of our Named Executive Officers and our stockholders. The Compensation Committee generally
Long-Term Equity Awards
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Long-Term Equity Awards
seeks to provide equity award opportunities that are consistent with our compensation philosophy (with the potential for larger PRSU payments and stock price appreciation for exceptional performance). The Compensation Committee also believes that utilizing time-based equity incentives for a portion of our long-term equity awards is essential in promoting executive retention. 2023 Annual Equity Awards On July 5, 2023, the Compensation Committee and, in Dr. Su’s case, the non-management members of our Board, approved the following aggregate intended target values and annual equity awards under our 2023 Plan, each of which was granted to the listed Named Executive Officer on August 9, 2023:
Long-Term Equity Awards
| Named Executive Officer | PRSUs (Target # of Shares) | Time-Based RSUs | Time-Based Stock Options | Aggregate Intended Target Value(1) | | Lisa Su | 158,562 | — | 106,474 | $24,000,000 | | Jean Hu(2) | 39,640 | 13,213 | 26,618 | $7,500,000 | | Victor Peng | 52,854 | 17,618 | 35,491 | $10,000,000 | | Philip Guido(3) | 31,712 | 10,570 | 21,294 | $6,000,000 | | Forrest Norrod(4) | 34,355 | 11,451 | 23,069 | $6,500,000 |
Long-Term Equity Awards
| (1) Amounts reflect intended target value as approved in July 2023. The amounts reported in the 2023 Summary Compensation Table represent the grant date fair values (i.e., accounting values) of these awards computed in accordance with Accounting Standards Codification (ASC) Topic 718. |
Long-Term Equity Awards
| (2) Amounts shown for Ms. Hu do not include the “make-whole” equity award of 92,360 time-based RSUs or the sign-on equity award of 65,971 time-based RSUs and 65,971 PRSUs that were granted to Ms. Hu on February 15, 2023, pursuant to the terms of her offer letter. For a discussion of Ms. Hu’s offer letter, see “Executive Summary—2023 Chief Financial Officer New Hire Package” above. |
Long-Term Equity Awards
| (3) Amounts shown for Mr. Guido do not include the “make-whole” equity award of 33,971 time-based RSUs or the sign-on equity award of 22,482 time-based RSUs that were granted to Mr. Guido on July 10, 2023, pursuant to the terms of his offer letter. For a discussion of Mr. Guido’s offer letter, see “Executive Summary—2023 Chief Commercial Officer New Hire Package” above. |
Long-Term Equity Awards
| (4) Amounts shown for Mr. Norrod do not include his promotion retention equity award of 32,985 PRSUs and 32,985 time-based RSUs, which was granted on February 15, 2023, in connection with his promotion as our Executive Vice President and General Manager, Data Center Solutions Group. For a discussion of Mr. Norrod’s promotion retention equity award, see “Executive Summary—2023 Executive Vice President Promotion” above. |
Long-Term Equity Awards
As reflected in the table above, the aggregate intended target value of Dr. Su’s 2023 annual long-term equity award was converted into a mix of 75% PRSUs and 25% stock options using a conversion price of $113.52 (i.e., the average closing price of our common stock over the 30 trading-day period ending on August 9, 2023, the 2023 annual program’s grant date) (the “Conversion Price”), and, for the stock options, also using an additional factor of 49.64% that correlates to the Black-Scholes value we use for accounting purposes. For Ms. Hu and Messrs. Peng, Norrod and Guido, their respective aggregate intended target values were converted into a mix of 60% PRSUs, 20% time-based RSUs and 20% stock options the Conversion Price and, for the stock options, also using an additional factor of 49.64% that correlates to the Black-Scholes value we use for accounting purposes. The accounting values of these awards differ from the aggregate intended target values reported in the table above for various reasons, including: (a) the grant date closing price of our common stock (which is used in determining the accounting values) was lower than the Conversion Price, and (b) each target PRSU has an accounting value that is approximately 124.73% of the fair market value of the underlying share of our common stock. In approving the aggregate intended target value of each Named Executive Officer’s 2023 annual long-term equity award, the Compensation Committee (the non-management members of our Board for Dr. Su) reviewed data showing the market-competitive award levels based on the 2023 Executive Compensation Peer Group, the potential realizable value of each Named Executive Officer’s then-outstanding equity holdings, and the projected accounting cost of the awards based on information available as of July 5, 2023. Additionally, the Compensation Committee (the non-management members of our Board for Dr. Su) considered the potential realizable value of each Named Executive Officer’s then-outstanding equity holdings, our executive retention objectives and continuity within senior management and the following high-level corporate goals: achieve fiscal 2023 financial results, execute industry-leading roadmap and
Long-Term Equity Awards
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Long-Term Equity Awards
meet customer commitments. The achievement of these high-level goals drive our overall company business strategy and, correspondingly, the attainment of the performance objectives in our long-term incentive compensation program. 2023 Annual PRSU Awards. The 2023 annual PRSU awards (the “2023 Annual PRSUs”) provide for a payout that will range from 0% to 250% of the target number of shares of our common stock subject to the award. The actual number of shares earned by each Named Executive Officer will be calculated as follows:
Long-Term Equity Awards
| • | Each Named Executive Officer will earn between 0% and 200% of his or her target number of shares (the “Initial Earned Shares”) depending on the return on our stock price relative to the total shareholder return of the S&P 500 Index over the period (Performance Period) beginning August 9, 2023 and ending August 9, 2026 (or, if earlier, the date of a change of control), provided that if the absolute return on our stock price during the Performance Period is negative, the Initial Earned Shares is capped at 100% of the target number of shares. |
Long-Term Equity Awards
| • | In alignment with our long-term growth strategy, we used EPS growth as an upside modifier to the award. If we meet or exceed challenging pre-established non-GAAP EPS growth targets from our 2023 to our 2025 fiscal year, award payouts will be increased to 125% or 150% of each Named Executive Officer’s Initial Earned Shares (if applicable, the “Adjusted Earned Shares”). In no event, however, will the Named Executive Officer’s Adjusted Earned Shares exceed 250% of his or her target number of shares. |
Long-Term Equity Awards
Any PRSUs that are earned will generally be settled on the later of August 15, 2026, or the date following the Compensation Committee’s certification of our performance achievement. Each Named Executive Officer must be continuously employed through the last day of the Performance Period to receive his or her earned shares, except to the extent an event triggers accelerated vesting of the 2023 Annual PRSUs under the terms of his or her employment or other agreement, as applicable. Stock Options. Stock options are intended to align the interests of our Named Executive Officers with the interests of our stockholders because they will not realize any financial benefit from these awards unless our stock price increases above the exercise price over the seven-year option term. The stock options have an exercise price equal to 100% of the fair market value of our common stock on the grant date, which was $110.47 per share. The stock options vest (and become exercisable) as to one-fourth of the underlying shares on each of August 9, 2024, August 9, 2025, August 9, 2026 and August 9, 2027, subject to the Named Executive Officer’s continued employment with us through each vesting date (unless his or her employment agreement or other agreement with us provides otherwise). The service-based vesting requirements are intended to further our retention objectives. The stock options expire seven years after the grant date, subject to earlier expiration if the Named Executive Officer’s employment with us terminates. RSUs. RSUs are intended to encourage executive retention, manage share dilution, recognize individual performance and align the interests of our Named Executive Officers with our stockholders because the value of the awards is tied to the market value of our common stock at the time of vesting. All of the RSUs granted to our Named Executive Officers in 2023 vest as to one-fourth of the underlying shares on each of August 9, 2024, August 9, 2025, August 9, 2026 and August 9, 2027, subject to the Named Executive Officer’s continued employment with us through each vesting date (unless his or her employment agreement or other agreement with us provides otherwise). 2020 PRSUs – Performance Results The annual PRSUs that were granted to each of our Named Executive Officers (other than Ms. Hu and Messrs. Peng and Guido) on August 9, 2020 (the “2020 PRSUs”) became earned and settled in August 2023 at 250% of target (i.e., maximum performance achievement). The Compensation Committee certified achievement at 250% of target as a result of our (a) total shareholder return exceeding the total shareholder return of the S&P 500 Index by more than 50 percentage points over the three-year performance period that began August 9, 2020 and ended August 9, 2023, and (b) achievement of fiscal 2022 non-GAAP earnings per share (“Non-GAAP EPS”) of $3.50, which represented a greater than 30% compound annual growth rate in our non-GAAP earnings per share from our fiscal 2020 Non-GAAP EPS of $1.29.
Long-Term Equity Awards
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Long-Term Equity Awards
Grant Timing Practices We have no practice or policy of coordinating or timing the release of the Company information around the grant date of our annual long-term equity awards. Our annual long-term equity awards are typically granted in July or August. On occasion, we grant equity awards outside of our annual grant cycle for new hires, promotions, recognition, retention or other purposes. These “off cycle” awards are granted only on a limited basis.
Change of Control Agreements and Arrangements
Change of Control Agreements and Arrangements Our Chief Executive Officer has an employment agreement that establishes her base salary and provides for annual incentive and long-term incentive awards under our approved plans (i.e., the EIP, 2023 Plan, and 2004 Plan). In addition, the agreement provides for certain payments and benefits in the event of certain termination of employment scenarios, including following a change of control of AMD. For further information on this agreement, see the “Severance and Change in Control Arrangements” section beginning on page 77. With the exception of our Chief Executive Officer, each of our other Named Executive Officers is party to a change of control agreement with us. These agreements and the change-of-control provisions of Dr. Su’s employment agreement are designed to encourage the continued services of the covered Named Executive Officer in the event of a potential change of control of AMD and to allow for a smooth leadership transition upon such a change of control. In addition, these agreements and the change-in-control provisions in Dr. Su’s employment agreement are intended to provide incentives to the Named Executive Officer to effectively execute the directives of our Board, even in the event that such actions may result in the elimination of the Named Executive Officer’s position. In April 2009, AMD adopted a policy to not enter into any new change of control agreements or arrangements containing an excise tax gross-up provision. Our Named Executive Officers’ change of control agreements and the change-of-control provisions of Dr. Su’s employment agreement do not provide for excise tax gross-ups.
Change of Control Agreements and Arrangements
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Termination of Employment Required to Trigger Payments
Termination of Employment Required to Trigger Payments Under the terms and conditions of these change of control agreements and the change-of-control provisions of Dr. Su’s employment agreement, each of our Named Executive Officers (other than Mr. Kumar) is eligible to receive certain specified payments and benefits only if (a) a “change of control” of us occurs and (b) the Named Executive Officer’s employment is terminated or the Named Executive Officer is constructively discharged within two years of the change of control transaction (a “double trigger” arrangement). The Compensation Committee believes this structure strikes a balance between our incentive arrangements and our executive hiring and retention objectives without providing “windfall” payments and benefits to any Named Executive Officers who continue employment with an acquiring entity following a change of control of AMD. For a detailed description of these agreements and arrangements with our Named Executive Officers, as well as an estimate of the amounts payable under such agreements and arrangements as of the last day of fiscal 2023, see the “Severance and Change in Control Arrangements” section.
Severance and Separation Arrangements
Severance and Separation Arrangements Any post-employment compensation payable to our Chief Executive Officer is governed solely by her employment agreement, the terms of which were the result of arms-length negotiations between her and the Compensation Committee. Under her employment agreement, Dr. Su is eligible to receive certain specified payments and benefits in the event that her employment is involuntarily terminated. The Compensation Committee believes that the amount payable to Dr. Su pursuant to her employment agreement is reasonable and competitive and provides transition assistance in the event of her involuntary termination of employment, with the goal of keeping her focused on our business rather than her personal circumstances. With the exception of our Chief Executive Officer and Mr. Kumar, all of our other Named Executive Officers participate in our Executive Severance Plan for Executive Vice Presidents and Senior Vice Presidents (the “Executive Severance Plan”). The Executive Severance Plan is designed to provide uniform treatment in the event of an involuntary termination of employment of our U.S. senior executives (except our Chief Executive Officer) and to provide transition assistance in such instances with the goal of keeping these senior executives focused on our business rather than their personal circumstances. A Named Executive Officer is not eligible to receive payments and benefits under the Executive Severance Plan if he or she receives severance payments and benefits in connection with a change of control of AMD pursuant to his or her change of control agreement. The Compensation Committee believes that the Executive Severance Plan provides the covered executives important protections and promotes our objectives of attracting and retaining executive talent. For a detailed description of the post-employment compensation arrangements of our Named Executive Officers, as well as an estimate of the amounts payable under such arrangements as of the last day of fiscal 2023, see the “Severance and Change in Control Arrangements” section.
Devinder Kumar’s Retirement Transition Agreement and General Release
Devinder Kumar’s Retirement Transition Agreement and General Release Mr. Kumar announced his retirement as our Executive Vice President, Chief Financial Officer and Treasurer on January 8, 2023. In order to ensure a smooth transition and to recognize Mr. Kumar’s significant contributions over his almost 40-year tenure with AMD, we entered into a Retirement Transition Agreement and General Release with him on February 15, 2023 (the “Retirement Transition Agreement”). Mr. Kumar remained with us as an executive officer and employee until his retirement on April 14, 2023. We do not have a retirement policy that is generally applicable to long-term equity awards. However, in certain limited circumstances, such as for long-tenured, dedicated employees like Mr. Kumar who have had an exceptional impact on the Company over the course of their tenure, the Compensation Committee may provide for retirement treatment of equity awards on a case-by-case basis. Pursuant to the Retirement Transition Agreement, in connection with his termination of employment Mr. Kumar received:
Devinder Kumar’s Retirement Transition Agreement and General Release
| • | Twelve (12) months of accelerated vesting with respect to his outstanding unvested RSUs and stock options, and Mr. Kumar’s outstanding stock options continue to be exercisable by him until the earlier of the second anniversary of his termination date or the option expiration date; |
Other Compensation Policies
Other Compensation Policies Compensation Recovery (“Clawback”) Rights In November 2023, we adopted a compensation recovery (“clawback”) policy in compliance with the listing standards of Nasdaq. In the event that we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under U.S. securities law, the policy provides that we will recoup compensation from each current or former executive officer who, during the three-year period preceding the date on which a restatement is required, received compensation from incentive awards based on the erroneous financial data that exceeds the amount of incentive-based compensation the executive would have received based on the restatement. The Compensation Committee has sole discretion to determine how to seek recovery under the policy and may forgo recovery if it determines that recovery would be impracticable and either the cost of recovery would exceed the amount sought to be recovered, or that recovery would violate a home-country law that was adopted prior to November 28, 2022, or would cause an otherwise tax-qualified retirement plan broadly available to our employees to fail to meet applicable tax qualification requirements. In addition, our Worldwide Standards of Business Conduct provide that we may pursue all remedies available under applicable law to recover any incentive-based or other compensation (including equity awards) paid or granted to our employees or agents in the event of such individual’s direct involvement with fraud, misconduct or gross negligence which contributes to an accounting restatement as a result of our material noncompliance with any financial reporting laws. Finally, the award agreement for each stock option, RSU, and PRSU granted since May 2010 to an employee at or above the level of senior vice president (which includes our Named Executive Officers) has included a compensation recoupment (“clawback”) provision. The clawback provides the Compensation Committee with the right to recover all or a portion of the compensation attributable to the award if the employee’s direct involvement with fraud, misconduct or his or her gross negligence contributes to or results in us being required to prepare an accounting restatement as a result of our material noncompliance with any financial reporting requirement under the federal securities laws. The clawback does not apply to any award granted more than 18 months before the date of the first public issuance or SEC filing of the financial document embodying the reporting requirement. In addition, (a) with respect to awards granted in and after August 2015, we may recoup the award if the recipient violates the non-competition, non-solicitation or confidentiality terms of the award agreement as permitted under applicable law, or fails to comply with any agreement with us regarding inventions, intellectual property rights, or proprietary information or material, and (b) with respect to awards granted after May 2019, we may recoup the award if the recipient engages in certain workplace misconduct (including sexual harassment or age, sex or other prohibited discrimination) or a criminal act involving moral turpitude. The Compensation Committee may exercise these clawback rights by cancellation, forfeiture, repayment or disgorgement of any profits realized by the employee from the sale of our securities. Stock Ownership Requirements Our stock ownership requirements are designed to increase our Named Executive Officers’ stakes in us and to align their interests more closely with those of our stockholders.
Other Compensation Policies
These requirements provide that on or before the Ownership Achievement Date (as defined below), our Chief Executive Officer should attain an investment position in our common stock equal to the lesser of (a) six times her then-current annual base salary or (b) 125,000 shares, and our other Named Executive Officers should attain an investment position in our common stock equal to the lesser of (x) 2.5 times their then-current annual base salaries or (y) 30,000 shares. Shares of our common stock counted toward the minimum stock ownership requirements include any shares held directly or indirectly by a Named Executive Officer. The “Ownership Achievement Date” is the later of August 7, 2025, or five years from first appointment as an executive officer. Until the guideline is achieved, each Named Executive Officer is encouraged to retain at least 10% of the net shares obtained through our stock incentive plans. For this purpose, the “net shares” are the number of shares received from the exercise of stock options or the vesting of restricted stock or RSU awards, less the number of shares the Named Executive Officer sells to cover the exercise price of stock options or sells or has withheld to pay taxes. As of December 30, 2023, each of our Named Executive Officers had satisfied his or her applicable stock ownership requirement or has time remaining to do so.
RISK ANALYSIS OF OUR COMPENSATION POLICIES AND PRACTICES
| • | Our compensation practices and policies appropriately balance base pay versus variable pay and short-term versus long-term incentives; |
RISK ANALYSIS OF OUR COMPENSATION POLICIES AND PRACTICES
| • | Although the EIP, Annual Incentive Plan, LTI and Sales Incentive Plan have variability of payout, the Compensation Committee believes that any potential risks associated with such plans are controlled or mitigated by one or more of the following: (i) the performance goals being multi-dimensional (i.e., adjusted non-GAAP net income, adjusted non-GAAP free cash flow, revenue), thereby increasing the range of performance over which incentives are paid; (ii) the performance goals being aligned with our business objectives and being quantitative financial measures; (iii) the use of sliding payout scales, with the payouts in certain instances being linearly interpolated for performance falling between the performance levels set by the Compensation Committee; (iv) the ability of the Compensation Committee and/or management to exercise discretion to reduce payouts; (v) the existence of multiple internal controls and approval processes that are intended to prevent manipulation of outcomes by any employee, including the Named Executive Officers; and (vi) the incentive opportunities being capped; |
RISK ANALYSIS OF OUR COMPENSATION POLICIES AND PRACTICES
| • | Although the grant of equity awards under the 2023 Plan could motivate our employees to, among other things, focus on increasing our short-term stock price rather than the creation of long-term stockholder value, the Compensation Committee believes that potential risks are controlled or mitigated by one or more of the following: (i) awarding a combination of PRSUs, RSUs and stock options; (ii) three-year vesting and performance period for PRSUs (with the exception of the Value Creation Equity Awards granted in fiscal 2019, which have a five-year performance period); (iii) the vesting provisions of stock options and RSUs occurring over multi-year periods, (iv) caps on performance-based compensation opportunities; and (v) our stock ownership guidelines for our executive officers. In addition, we prohibit our employees, including Named Executive Officers, from engaging in hedging transactions in our securities; and |
2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Lisa T. Su | | | | | | | | | | | 2023 | 1,200,000 | — | 21,848,258 | 5,838,512 | 1,432,800 | 28,711 | 30,348,281 | | Chair, President and Chief Executive Officer | 2022 | 1,148,889 | — | 21,900,270 | 6,198,972 | 918,800 | 52,990 | 30,219,921 | | | 2021 | 1,076,317 | — | 19,929,804 | 5,161,344 | 3,190,000 | 140,642 | 29,498,107 | | Jean Hu | | | | | | | | | | Executive Vice President, Chief Financial Officer and Treasurer | 2023 | 683,173 | 2,000,000 | 28,146,669 | 1,459,601 | 507,968 | 16,458 | 32,813,869 | | Philip Guido | | | | | | | | | | Executive Vice President and Chief Commercial Officer | 2023 | 418,269 | 3,000,000 | 17,410,993 | 1,167,659 | 309,161 | 54,525 | 22,360,607 | | Forrest Norrod | | | | | | | | | | Executive Vice President and General Manager, Data Center Solutions Group | 2023 | 693,462 | — | 13,258,106 | 1,264,991 | 518,644 | 15,438 | 15,750,641 | | Victor Peng | | | | | | | | | | President, AMD | 2023 | 915,000 | — | 9,229,013 | 1,946,153 | 682,819 | 16,458 | 12,789,443 | | | 2022 | 793,750 | 4,750,000 | 18,258,346 | 2,490,641 | 421,875 | 15,453 | 26,730,065 | | Devinder Kumar(7) | | | | | | | | | | Former Executive Vice President, Chief Financial Officer and Treasurer | 2023 | 251,231 | — | 5,644,769 | 1,214,286 | — | 16,831 | 7,127,117 | | | 2022 | 692,639 | — | 4,888,375 | 1,383,694 | 346,250 | 14,283 | 7,325,241 | | | 2021 | 650,385 | — | 3,902,877 | 1,010,763 | 1,300,000 | 14,188 | 6,878,213 |
2023 SUMMARY COMPENSATION TABLE
| (1) For fiscal 2023, amounts represent (i) a one-time sign-on bonus payment of $2,000,000 for Ms. Hu and (ii) a one-time sign-on bonus payment of $3,000,000 for Mr. Guido. For a discussion of Ms. Hu’s and Mr. Guido’s offer letters, see “Compensation Discussion and Analysis—Executive Summary—2023 Chief Financial Officer New Hire Package” and “Compensation Discussion and Analysis—Executive Summary—2023 Chief Commercial Officer New Hire Package.” For fiscal 2022, amount represents a one-time sign-on bonus payment of $4,750,000 for Mr. Peng in connection with the acquisition of Xilinx, Inc. |
2023 SUMMARY COMPENSATION TABLE
| (2) Amounts shown in the column do not reflect dollar amounts actually received by the Named Executive Officers. Instead, these amounts represent the aggregate grant date fair value of the RSUs and PRSUs granted in the year indicated computed in accordance with ASC Topic 718. The grant date fair value (which is sometimes referred to herein as the “accounting value”) is used to recognize the accounting expense for long-term equity awards. For fiscal 2023, the amounts shown include the grant date fair value of the PRSUs awarded in fiscal 2023 to each Named Executive Officer other than Mr. Kumar, as set forth in the table below. The grant date fair value of the PRSUs is calculated by an outside professional valuation consultant using a Monte-Carlo simulation model and based upon a discounted cash flow analysis of the probability-weighted payoffs of a share-based payment assuming a variety of possible stock price paths and represents the estimate of the most probable aggregate compensation cost to be recognized over the requisite service period determined as of the grant date under ASC Topic 718. There were no stock awards to Mr. Kumar during fiscal 2023. The amount reported for Mr. Kumar for fiscal 2023 represents the incremental fair value, determined in accordance with ASC Topic 718, associated with (i) the twelve months of vesting service credit in respect of his outstanding unvested RSUs as of his retirement, (ii) service vesting credit with respect to his 2020 PRSUs, and (iii) pro-rated vesting at target-level performance for Mr. Kumar’s 2021 PRSUs and 2022 PRSUs, in each case pursuant to the terms of his Retirement Transition Agreement. For a discussion of the assumptions made in the valuations reflected in this column, see Note 12 of the Notes to Consolidated Financial Statements in our Annual Report. For more information on the RSUs and PRSUs held by Mr. Kumar during fiscal 2023, see “Compensation Discussion and Analysis—Severance and Separation Arrangements—Devinder Kumar’s Retirement Transition Agreement and General Release” above. |
2023 SUMMARY COMPENSATION TABLE
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2023 SUMMARY COMPENSATION TABLE
2023 Summary Compensation Table (continued)
2023 SUMMARY COMPENSATION TABLE
| The aggregate accounting values of the PRSUs granted to our Named Executive Officers in fiscal 2023 are as follows: |
2023 SUMMARY COMPENSATION TABLE
| Named Executive Officer | Grant Date | Shares Underlying PRSUs at Target (100%) (#) | Shares Underlying PRSUs at Maximum (250%) (#) | Grant Date Fair Value ($) | | Lisa T. Su | 8/9/2023 | 158,562 | 396,405 | 21,848,258 | | Jean Hu | 2/15/2023 | 65,971 | 164,928 | 7,738,398 | | | 8/9/2023 | 39,640 | 99,100 | 5,461,996 | | Philip Guido | 6/15/2023 | 22,482 | 56,205 | 4,611,508 | | | 8/9/2023 | 31,712 | 79,280 | 4,369,596 | | Forest Norrod | 2/15/2023 | 32,985 | 65,970 | 4,449,677 | | | 8/9/2023 | 34,355 | 85,888 | 4,733,775 | | Victor Peng | 8/9/2023 | 52,854 | 132,135 | 7,282,753 |
2023 SUMMARY COMPENSATION TABLE
| In accordance with Instruction 3 to Item 402(c)(2)(v), assuming that the highest level of performance conditions of the PRSUs granted to our Named Executive Officers in fiscal 2023 will be achieved, the maximum possible value of the PRSUs, using our stock price on the grant date of the PRSUs, is: $43,790,860 for Dr. Su; $24,996,101 for Ms. Hu; $15,740,971 for Mr. Guido; $15,107,317 for Mr. Norrod; and $14,596,953 for Mr. Peng. |
2023 SUMMARY COMPENSATION TABLE
| (3) Amounts shown in this column do not reflect dollar amounts actually received by the Named Executive Officers. Instead, the amounts represent the aggregate grant date fair value of option awards granted in the year indicated computed in accordance with ASC Topic 718. The amount reported for Mr. Kumar for fiscal 2023 represents the incremental fair value, determined in accordance with ASC Topic 718, associated with the twelve months of vesting service credit awarded in respect of his outstanding unvested stock options as of his retirement and the extension of the exercise period of his outstanding stock options to two years following his retirement, in each case pursuant to the terms of his Retirement Transition Agreement. For a discussion of the assumptions made in the valuations reflected in this column, see Note 12 of the Notes to Consolidated Financial Statements in our Annual Report. For more information on the stock options held by Mr. Kumar during fiscal 2023, see “Compensation Discussion and Analysis—Severance and Separation Arrangements—Devinder Kumar’s Retirement Transition Agreement and General Release” above. |
2023 SUMMARY COMPENSATION TABLE
| (4) Amounts represent cash performance bonuses paid under the EIP for fiscal 2023. See “Compensation Discussion and Analysis—Fiscal 2023 Compensation Elements—Annual Cash Performance Bonuses” above for more information about these payments, including the pre-established financial measures under the EIP. |
2023 SUMMARY COMPENSATION TABLE
| (5) The following table sets forth the components of the amounts presented in the All Other Compensation column for fiscal 2023: |
2023 SUMMARY COMPENSATION TABLE
| Named Executive Officer | Matching Contributions to 401(k) ($) | Life Insurance Premiums Paid By Company ($) | Other ($)(6) | Total ($) | | Lisa T. Su | 14,850 | 2,412 | 11,449 | 28,711 | | Jean Hu | 14,850 | 1,608 | — | 16,458 | | Philip Guido | 9,788 | 1,608 | 43,129 | 54,525 | | Forrest Norrod | 13,725 | 1,713 | — | 15,438 | | Victor Peng | 14,850 | 1,608 | — | 16,458 | | Devinder Kumar | — | — | 16,831 | 16,831 |
2023 SUMMARY COMPENSATION TABLE
| (6) Represents (i) for Dr. Su, the aggregate incremental cost of spousal travel on Company aircraft for business trips, (ii) for Mr. Guido, emergency travel on Company aircraft to evacuate him and members of his family from Maui, Hawaii due to the August 2023 Maui wildfires, calculated using the Company’s variable operating cost per flight hour, and (iii) for Mr. Kumar, the total COBRA reimbursement benefit provided by the Company pursuant to the terms of his Retirement Transition Agreement. |
2023 SUMMARY COMPENSATION TABLE
| (7) Mr. Kumar stepped down as CFO and Treasurer in January 2023, and retired from AMD in April 2023. |
2023 SUMMARY COMPENSATION TABLE
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OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END The following table shows all outstanding equity awards held by the Named Executive Officers as of December 30, 2023. The equity awards reported in the Option Awards column consist of non-qualified stock options. The equity awards in the Stock Awards column consist of RSUs and PRSUs.
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Lisa T. Su | | | | | | | | | | | | | | | | | 15,995(2) | 2,357,823 | | | | | | | | | | 48,662(3) | 7,173,265 | | | | | | | | | | | | 775,194(4) | 114,271,348 | | | | | | | | | | 154,502(5) | 22,775,140 | | | | | | | | | | 176,479(6) | 26,014,769 | | | | | | | | | | 163,318(7) | 24,074,706 | | | 47,577 | — | | 12.83 | 8/9/2024 | | | | | | | 316,496 | — | | 19.10 | 8/9/2025 | | | | | | | 224,727 | — | | 34.19 | 8/9/2026 | | | | | | | 120,642 | — | | 84.85 | 8/9/2027 | | | | | | | 74,685 | 37,344(8) | | 107.58 | 8/9/2028 | | | | | | | 34,943 | 104,829(9) | | 95.54 | 8/9/2029 | | | | | | | — | 106,474(10) | | 110.47 | 8/9/2030 | | | | | | Jean Hu | | | | | | | | | | | | | | | | | 65,971(11) | 9,724,785 | | | | | | | | | | 92,360(12) | 13,614,788 | | | | | | | | | | 13,213(13) | 1,947,728 | | | | | | | | | | | | 131,942(14) | 19,449,570 | | | | | | | | | | 40,829(7) | 6,018,603 | | | — | 26,618(10) | | 110.47 | 8/9/2030 | | | | | | Philip Guido | | | | | | | | | | | | | | | | | 22,482(18) | 3,314,072 | | | | | | | | | | 35,971(19) | 5,302,485 | | | | | | | | | | 10,570(13) | 1,558,124 | | | | | | | | | | | | 44,964(14) | 6,628,143 | | | | | | | | | | 32,663(7) | 4,814,853 | | | — | 21,294(10) | | 110.47 | 8/9/2030 | | | | | | Forrest Norrod | | | | | | | | | | | | | | | | | 2,959(2) | 436,186 | | | | | | | | | | 10,428(3) | 1,537,191 | | | | | | | | | | 32,985(12) | 4,862,319 | | | | | | | | | | 11,451(13) | 1,687,992 | | | | | | | | | | | | 28,575(5) | 4,212,241 | | | | | | | | | | 37,816(6) | 5,574,457 | | | | | | | | | | 41,231(20) | 6,077,862 | | | | | | | | | | 35,385(7) | 5,216,103 | | | 29,293 | — | | 12.83 | 8/9/2024 | | | | | | | 40,540 | — | | 19.10 | 8/9/2025 | | | | | | | 32,837 | — | | 34.19 | 8/9/2026 | | | | | | | 21,784 | — | | 84.85 | 8/9/2027 | | | | | | | 13,813 | 6,907(8) | | 107.58 | 8/9/2028 | | | | | | | 7,487 | 22,464(9) | | 95.54 | 8/9/2029 | | | | | | | — | 23,069(10) | | 110.47 | 8/9/2030 | | | | |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
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OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
Outstanding Equity Awards at 2023 Fiscal Year-End (continued)
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Victor Peng | | | | | | | | | | | | | | | | | 57,681(15) | 8,502,756 | | | | | | | | | | 19,551(3) | 2,882,013 | | | | | | | | | | 17,618(13) | 2,597,069 | | | | | | | | | | 23,697(16) | 3,493,175 | | | | | | | | | | 18,642(17) | 2,748,017 | | | | | | | | | | | | 70,906(6) | 10,452,253 | | | | | | | | | | 54,439(7) | 8,024,853 | | | 14,039 | 42,119(9) | | 95.54 | 8/9/2029 | | | | | | | — | 35,491(10) | | 110.47 | 8/9/2030 | | | | | | Devinder Kumar | | | | | | | | | | | | — | 7,799 | | 95.54 | 4/14/2025 | | | | |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (1) The dollar value of these awards is calculated by multiplying the number of units by $147.41 per share, the last reported sales price of our common stock on December 29, 2023, the last trading day of fiscal 2023. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (2) This RSU award vested 33 1/3% on each of August 9, 2022 and 2023 and 33 1/3% will vest on August 9, 2024, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (3) This RSU award vested 25% on August 9, 2023, and 25% will vest on each of August 9, 2024, 2025 and 2026, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (4) Represents the unvested portion of the Value Creation Equity Award at 200% (the “earned PRSUs”) which will vest on August 9, 2024, subject to continued service or upon Dr. Su’s “covered termination” within the meaning of her employment agreement. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (5) Amount reflects estimated PRSU achievement based on performance status as of December 29, 2023 (161% of Target), adjusted for the value cap described below. The actual number of shares that may be earned, if at all, is contingent upon the achievement of pre-established performance metrics over the three-year period ending August 9, 2024. Vested PRSUs will generally be settled on the later of August 15, 2024, or the date following the Compensation Committee’s certification of performance. The amount of shares that may be earned is between 0% and 250% of the target number of shares. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (6) Amount reflects estimated PRSU achievement based on performance status as of December 29, 2023 (136% of Target). The actual number of shares that may be earned, if at all, is contingent upon the achievement of pre-established performance metrics over the three-year period ending August 9, 2025. Vested PRSUs will generally be settled on the later of August 15, 2025, or the date following the Compensation Committee’s certification of performance. The number of shares that may be earned is between 0% and 250% of the target number of shares. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (7) Amount reflects estimated PRSU achievement based on performance status as of December 29, 2023 (103% of Target). The actual number of shares that may be earned, if at all, is contingent upon the achievement of pre-established performance metrics over the three-year period ending August 9, 2026. Vested PRSUs will generally be settled on the later of August 15, 2026, or the date following the Compensation Committee’s certification of performance. The number of shares that may be earned is between 0% and 250% of the target number of shares. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (8) This option vested 33 1/3% on each of August 9, 2022 and 2023 and 33 1/3% will vest on August 9, 2024, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (9) This option vested 25% on August 9, 2023 and will vest 25% on each of August 9, 2024, 2025 and 2026, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (10) This option will vest 25% on each of August 9, 2024, 2025, 2026 and 2027, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (11) This RSU award will vest 100% on February 15, 2024, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (12) This RSU award will vest 33 1/3% on each of February 15, 2024, 2025 and 2026, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (13) This RSU award will vest 25% on each of August 9, 2024, 2025, 2026 and 2027, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (14) Amount reflects estimated PRSU achievement based on performance status as of December 29, 2023 (200% of Target). The actual number of shares that may be earned, if at all, is contingent upon the achievement of pre-established performance metrics over the three-year period ending February 15, 2026. Vested PRSUs will generally be settled on the later of March 1, 2026, or the date following the Compensation Committee’s certification of performance. The number of shares that may be earned is between 0% and 250% of the target number of shares. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (15) This RSU award vested 33 1/3% on March 15, 2023, and 33 1/3% will vest on March 15, 2024 and 2025, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (16) This RSU award was originally granted under the Xilinx stock plan and vested 25% on each of July 12, 2022 and 2023 and 25% will vest on each of July 2024 and 2025, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (17) This RSU was originally granted under the Xilinx stock plan and 55,924 shares were accelerated on April 29, 2022 in accordance with Mr. Peng’s change in control agreement. Subsequently, 18,641 shares vested on July 12, 2022 and 18,642 shares vested on July 12, 2023, with and additional 18,642 shares which will vest on July 12, 2024, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (18) This RSU award will vest 33 1/3% on each of June 15, 2024, 2025 and 2026, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (19) This RSU award will vest 100% on June 15, 2024, subject to continued service. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (20) Represents a Value Creation Equity Performance Restricted Stock award. The amount reflects estimated PRSU achievement based on performance status as of December 29, 2023 (125% of Target), adjusted for the value cap described below. The actual number of shares that may be earned, if at all, is contingent upon the achievement of pre-established performance metrics over the three-year period ending February 15, 2026. Vested PRSUs will generally be settled no earlier than the date that is five business days following the Compensation Committee’s certification of performance. The amount of shares that may be earned is between 0% and 200% of the target number of shares. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
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GRANTS OF PLAN-BASED AWARDS IN 2023
GRANTS OF PLAN-BASED AWARDS IN 2023 The following table sets forth all plan-based awards granted to the Named Executive Officers in fiscal 2023.
GRANTS OF PLAN-BASED AWARDS IN 2023
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | | | | | | Plan Name | Grant Date | Compensation Committee Action Date | Threshold (#) | Target (#) | Maximum (#) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/ Share) | Grant Date Fair Value of Stock and Option Awards ($)(5) | | Lisa T. Su | | | | | | | | | | | | | | EIP | | | — | 2,400,000 | 4,800,000 | | | | | | | | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | — | 158,562 | 396,405 | | | | 21,848,258 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | | 106,474 | 110.47 | 5,838,512 | | Jean Hu | | | | | | | | | | | | | | EIP | | | — | 850,868 | 1,701,735 | | | | | | | | | 2004 Plan | 2/15/2023 | 12/28/2022 | | | | — | 65,971 | 164,928 | | | | 7,738,398 | | 2004 Plan | 2/15/2023 | 12/28/2022 | | | | | | | 65,971 | | | 5,619,410 | | 2004 Plan | 2/15/2023 | 12/28/2022 | | | | | | | 92,360 | | | 7,867,225 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | — | 39,640 | 99,100 | | | | 5,461,996 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | 13,213 | | | 1,459,640 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | | 26,618 | 110.47 | 1,459,601 | | Philip Guido | | | | | | | | | | | | | | EIP | | | — | 517,858 | 1,035,715 | | | | | | | | | 2023 Plan | 6/15/2023 | 3/6/2023 | | | | — | 22,482 | 56,205 | | | | 4,611,508 | | 2023 Plan | 6/15/2023 | 3/6/2023 | | | | | | | 35,971 | | | 4,469,037 | | 2023 Plan | 6/15/2023 | 3/6/2023 | | | | | | | 22,482 | | | 2,793,164 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | — | 31,712 | 79,280 | | | | 4,369,596 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | 10,570 | | | 1,167,688 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | | 21,294 | 110.47 | 1,167,659 | | Forrest Norrod | | | | | | | | | | | | | | EIP | | | — | 868,750 | 1,737,500 | | | | | | | | | 2004 Plan | 2/15/2023 | 2/8/2023 | | | | — | 32,985 | 65,970 | | | | 4,449,677 | | 2004 Plan | 2/15/2023 | 2/8/2023 | | | | | | | 32,985 | | | 2,809,662 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | — | 34,355 | 85,888 | | | | 4,733,775 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | 11,451 | | | 1,264,992 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | | 23,069 | 110.47 | 1,264,991 | | Victor Peng | | | | | | | | | | | | | | EIP | | | — | 1,143,750 | 2,287,500 | | | | | | | | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | — | 52,854 | 132,135 | | | | 7,282,753 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | 17,618 | | | 1,946,260 | | 2023 Plan | 8/9/2023 | 7/5/2023 | | | | | | | | 35,491 | 110.47 | 1,946,153 | | Devinder Kumar(6) | | | | | | | | | | | | | | 2004 Plan | | 2/14/2023 | | | | | | 39,242 | 10,442 | 23,245 | | 6,859,055 |
GRANTS OF PLAN-BASED AWARDS IN 2023
| (1) Amounts represent the estimated cash performance bonuses payable under the EIP for fiscal 2023. For the Named Executive Officers, the actual amounts paid under the EIP for fiscal 2023 are set forth in the “Non-Equity Incentive Plan Compensation” column of the “2023 Summary Compensation Table” above. |
GRANTS OF PLAN-BASED AWARDS IN 2023
| (2) Amounts represent PRSUs. See “Compensation Discussion and Analysis—Fiscal 2023 Compensation Elements—Long-Term Equity Awards” above for more information about the PRSUs, including the pre-established performance periods and performance measures, and see footnotes to the “Outstanding Equity Awards at 2023 Fiscal Year-End” table above for a description of the PRSU vesting schedules. Also see “Compensation Discussion and Analysis—Fiscal 2023 Compensation Elements—Long-Term Equity Awards—Value Creation Equity Awards” above for more information about the Value Creation Equity Awards. |
GRANTS OF PLAN-BASED AWARDS IN 2023
| (3) Amounts represent time-based RSUs. See footnotes to the “Outstanding Equity Awards at 2023 Fiscal Year-End” table above for a description of the RSU vesting schedules. |
GRANTS OF PLAN-BASED AWARDS IN 2023
| (4) Amounts represent stock options. See footnotes to the “Outstanding Equity Awards at 2023 Fiscal Year-End” table above for a description of the stock option vesting schedules. The stock options expire seven years after the grant date. |
GRANTS OF PLAN-BASED AWARDS IN 2023
| (5) Amounts reflect the grant date fair value of the respective award computed in accordance with ASC Topic 718. Regardless of the value on the grant date, the actual value that may be realized from an award is contingent upon the satisfaction of the applicable conditions to vesting of that award, and for stock options, also upon the excess of AMD’s stock price over the exercise price. With respect to the PRSUs, in accordance with SEC rules, amounts reflect the fair value at the grant date determined using a Monte-Carlo simulation model and based upon a discounted cash flow analysis of the probability-weighted payoffs of a share-based payment assuming a variety of possible stock price paths and represents the estimate of aggregate compensation cost to be recognized over the requisite service period determined as of the grant date under ASC Topic 718. For Mr. Kumar, the amount reflects the incremental fair value, determined in accordance with ASC Topic 718, associated with the |
GRANTS OF PLAN-BASED AWARDS IN 2023
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GRANTS OF PLAN-BASED AWARDS IN 2023
Grants of Plan-Based Awards in 2023 (continued)
GRANTS OF PLAN-BASED AWARDS IN 2023
| (i) acceleration of 10,442 RSUs, (ii) service vesting credit with respect to his 2020 PRSUs (which were earned at 250% of target in August 2023 based on actual performance for the three-year performance period ended August 9, 2023), (iii) pro-rated vesting at target for his 2021 PRSUs and 2022 PRSUs based on completed service during applicable performance periods and (iv) the acceleration of 23,245 stock options and the extension of the exercise period of his outstanding stock options to two years following his termination date, in each case pursuant to the terms of his Retirement Transition Agreement with the Company. For a discussion of the assumptions made in the valuations reflected in this column, see Note 12 of the Notes to Consolidated Financial Statements in our Annual Report. For a discussion of the assumptions made in the valuation reflected in these amounts, see Note 12 of the Notes to Consolidated Financial Statements in our Annual Report. For more information on the stock options, RSUs and PRSUs held by Mr. Kumar during fiscal 2023, see “Compensation Discussion and Analysis—Severance and Separation Arrangements—Devinder Kumar’s Retirement Transition Agreement and General Release” above. |
GRANTS OF PLAN-BASED AWARDS IN 2023
| (6) There were no stock option or stock awards granted to Mr. Kumar during fiscal 2023. The amounts reflect (a) the number of shares issued to Mr. Kumar during fiscal 2023 in settlement of the PRSUs and RSUs that vested upon his termination and (b) the number of stock options that vested upon his termination, in each case pursuant to his Retirement Transition Agreement. |
GRANTS OF PLAN-BASED AWARDS IN 2023
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OPTION EXERCISES AND STOCK VESTED IN 2023
OPTION EXERCISES AND STOCK VESTED IN 2023 The following table shows the value realized by the Named Executive Officers as a result of the exercise of stock options and stock awards that vested during 2023.
OPTION EXERCISES AND STOCK VESTED IN 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Lisa T. Su | 1,077,214 | 120,403,857 | 324,071 | 34,902,666 | | Jean Hu | — | — | — | — | | Philip Guido | — | — | — | — | | Forrest Norrod | — | — | 59,132 | 6,370,263 | | Victor Peng | — | — | 65,847 | 6,799,873 | | Devinder Kumar | 157,234 | 8,047,933 | 82,885 | 8,343,912 |
OPTION EXERCISES AND STOCK VESTED IN 2023
| (1) Value is the closing trading price of our common stock on the date of vesting multiplied by the number of vested shares. |
OPTION EXERCISES AND STOCK VESTED IN 2023
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2023 NONQUALIFIED DEFERRED COMPENSATION
2023 NONQUALIFIED DEFERRED COMPENSATION The following table shows information for the Named Executive Officers who had accounts in the Deferred Income Account Plan (the “DIA”), a non-qualified deferred compensation plan, in 2023. Except for amounts deferred and vested prior to January 1, 2005, the DIA is subject to Section 409A of the Code.
2023 NONQUALIFIED DEFERRED COMPENSATION
| Name | Executive Contributions in Last FY(1) ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings (Losses) in Last FY(2) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(3) | | Lisa T. Su | — | — | 154,411 | — | 1,119,843 | | Jean Hu | 38,481 | — | 3,984 | — | 42,465 | | Phillip Guido | 136,635 | — | 9,587 | — | 146,222 | | Devinder Kumar | — | — | 310,222 | 2,241,789 | 129,644 |
2023 NONQUALIFIED DEFERRED COMPENSATION
| (1) Amount is included in the “Salary” column for fiscal 2023 of the “2023 Summary Compensation Table” above. |
2023 NONQUALIFIED DEFERRED COMPENSATION
| (2) Represents the net amounts debited from the DIA accounts of Dr. Su, Ms. Hu and Messrs. Kumar and Guido as a result of the performance of the investment vehicles in which their accounts were deemed invested, as more fully described in the narrative disclosure below. These amounts do not represent above-market or preferential earnings (within the meaning of 17 CFR Section 229.402(c)(2)(viii)), and as a result are not reported in the “2023 Summary Compensation Table” above. |
2023 NONQUALIFIED DEFERRED COMPENSATION
| (3) Other than executive contributions in the fiscal year, no other aggregate amounts were reported as compensation for the Named Executive Officers in 2023, 2022 and 2021. |
2023 NONQUALIFIED DEFERRED COMPENSATION
We maintain the DIA, which allows eligible employees, including the Named Executive Officers, to voluntarily defer receipt of a portion of their salary, bonus and any commission payments until the date or dates selected by the participant. Participants may defer up to 50% of annual base salary and/or 100% of commissions and bonuses. Earnings on the deferred accounts are based on the performance of the investment funds selected by the participants. Participants make a deferral election, prior to the year in which the compensation is earned, that may not be terminated or changed during the year for which it was made. Generally, we make a discretionary contribution to the participant’s account if his or her annual base salary, minus his or her Section 401(k) contribution before the deferral, is greater than the annual compensation limit for Section 401(k) plans. The contribution, if any, is equal to the lesser of (i) 50% of the deferred compensation credited to the participant’s account for the year or (ii) a discretionary percentage of the participant’s base salary in excess of the eligible Section 401(k) compensation limit for the year minus the participant’s Section 401(k) contributions. For 2023, our discretionary contribution percentage under option (ii) above was 4.5%. Participants are 100% vested in the value of their accounts. Participants may select their desired benchmark investment fund(s) in which their accounts are deemed to be invested and may change their investment elections at any time, with such change effective as of the next business day. The amount of investment gain or loss that is credited to the participant’s account depends on the participant’s investment election. For 2023, we utilized investment funds in an array of asset classes, substantially aligned to those offered under our Section 401(k) plan. We have placed assets in mutual funds held in a Rabbi trust established for the DIA. For 2023, the investment return credited to Dr. Su’s, Ms. Hu’s, Mr. Guido’s and Mr. Kumar’s DIA accounts was 16.0%, 14.6%, 7.4% and 24.7%, respectively, based on their investment elections for their respective DIA accounts. This investment return was calculated by taking the aggregate gain or loss in fiscal 2023 and dividing it by the aggregate balance as of the beginning of fiscal 2023. The DIA accounts are distributed following a participant’s termination of employment with us unless the participant has elected an in-service withdrawal (scheduled or hardship withdrawal). At the time a participant makes his or her deferral election, he or she may elect a different form of distribution for such year’s deferred compensation. The participant may elect a single lump sum distribution or annual installment distributions over three to ten years. The default form of distribution is a single lump sum. A participant may change the form of distribution election, subject to the terms of the DIA. A participant may elect to withdraw all or part of his or her account while employed by us, subject to the terms of the DIA. The in-service withdrawal date must be at least two years after the plan year in which the election was made. An in-service withdrawal date may be changed, subject to the terms of the DIA. An unscheduled payment may also be made, subject to the terms of the DIA.
2023 NONQUALIFIED DEFERRED COMPENSATION
| 76 | ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement |
CHIEF EXECUTIVE OFFICER PAY RATIO
CHIEF EXECUTIVE OFFICER PAY RATIO For 2023:
CHIEF EXECUTIVE OFFICER PAY RATIO
| • | the annual total compensation for the median employee of the Company (other than our Chief Executive Officer) was $127,642; and |
CHIEF EXECUTIVE OFFICER PAY RATIO
| • | the annual total compensation of our Chief Executive Officer was $30,348,281(1). |
CHIEF EXECUTIVE OFFICER PAY RATIO
Based on this information, for 2023 the ratio of the annual total compensation of our Chief Executive Officer to the annual total compensation of the median employee was 238 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934. As permitted by SEC rules, to identify our median employee, we selected total estimated compensation which we calculated as annual base pay plus the target bonus plus the target value of stock awards granted to each employee during the year, as the compensation measure to be used to compare the total estimated compensation of our employees as of December 1, 2023. We annualized base pay and estimated bonus for any regular employees who commenced work during 2023 and did not annualize these amounts for temporary and seasonal employees. The annual total compensation of the median employee and the annual total compensation of the CEO were calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, and the median employee’s annual total compensation was converted to U.S. dollars using a currency exchange rate as of December 30, 2023. In addition, as permitted by SEC rules, we have omitted from our calculation approximately 75 employees who became employees as a result of our acquisition of Mipsology and Nod.AI.
CHIEF EXECUTIVE OFFICER PAY RATIO
| (1) For additional details on the compensation of our Chief Executive Officer, see the “Compensation Discussion and Analysis” section. |
CHIEF EXECUTIVE OFFICER PAY RATIO
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CHIEF EXECUTIVE OFFICER PAY RATIO
We are providing the following information pursuant to the SEC pay versus performance disclosure requirements set forth in Item 402(v) of SEC Regulation S-K (the “Pay Versus Performance Rule”), which requires disclosure of certain information about the relationships between our performance and the compensation of our named executive officers. The following table reports, for the three most-recent fiscal years, the compensation of our Chief Executive Officer and the average compensation of our other non-CEO named executive officers (“Non-CEO Named Executive Officers”), as well as the “Compensation Actually Paid” as calculated in accordance with the Pay Versus Performance Rule and certain performance measures required by the rule. The amounts reported as “Compensation Actually Paid” do not reflect the actual amount of compensation earned by or paid to our Chief Executive Officer or our Non-CEO Named Executive Officers and differ from the compensation amounts disclosed elsewhere in this proxy statement. For a discussion of our executive compensation program and philosophy, please refer to our “Compensation Discussion and Analysis” section.
CHIEF EXECUTIVE OFFICER PAY RATIO
| | Summary Compensation Table Total for CEO (1) | Compensation Actually Paid to CEO (1),(3) | Average Summary Compensation Table for Non- CEO Named Executive Officers (2) | Average Compensation Actually Paid to Non-CEO Named Executive Officers (2),(3) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($ Millions) | Non-GAAP Net Income ($ Millions) (6) | | Year | | | | | Total Shareholder Return (4) | Peer Group Total Shareholder Return (5) | | | | 2023 | $30,348,281 | $189,834,854 | $18,168,335 | $33,308,296 | $319 | $282 | $854 | $4,302 | | 2022 | $30,219,921 | $(160,142,075) | $13,263,125 | $(13,362,342) | $140 | $134 | $1,320 | $5,504 | | 2021 | $29,498,107 | $188,407,046 | $7,679,357 | $33,054,719 | $317 | $214 | $3,162 | $3,435 | | 2020 | $27,141,878 | $178,372,124 | $8,028,525 | $33,064,548 | $199 | $140 | $2,490 | $1,575 |
CHIEF EXECUTIVE OFFICER PAY RATIO
| (1) Amounts reported are for Lisa Su, who served as our Chief Executive Officer during each of the applicable fiscal years. |
CHIEF EXECUTIVE OFFICER PAY RATIO
| (2) Our non-CEO named executive officers (our “Non-CEO Named Executive Officers”) were: |
CHIEF EXECUTIVE OFFICER PAY RATIO
| 2023 | 2022 | 2021 | 2020 | | Jean Hu | Devinder Kumar | Devinder Kumar | Devinder Kumar | | Devinder Kumar (retired in April 2023) | Darren Grasby | Rick Bergman | Rick Bergman | | Philip Guido | Mark Papermaster | Darren Grasby | Darren Grasby | | Forrest Norrod | Victor Peng | Mark Papermaster | Mark Papermaster | | Victor Peng | | | |
CHIEF EXECUTIVE OFFICER PAY RATIO
| (3) Amounts in these columns show the “Compensation Actually Paid”, as calculated in accordance with the methodology prescribed by the SEC under the Pay Versus Performance Rule. The table below provides the adjustments to the Summary Compensation Table total compensation to arrive at the Compensation Actually Paid to our CEO and the average Compensation Actually Paid to our Non-CEO Named Executive Officers for fiscal year 2023. |
CHIEF EXECUTIVE OFFICER PAY RATIO
| Adjustments to Reported Summary Compensation Table Total for CEO and Non-CEO Named Executive Officers | 2023 | | | | CEO | Non-CEO Named Executive Officers (Average) | | Summary Compensation Table Total | $30,348,281 | $18,168,335 | | Subtract the amounts reported for fiscal 2023 under the Stock Awards and Option Awards columns in the Summary Compensation Table | $(27,686,770) | $(16,148,448) | | Add year-end fair value of equity awards granted during fiscal year 2023 that are unvested as of fiscal year end | $42,796,052 | $23,926,343 | | Add (subtract) year-over-year change in fair value of equity awards granted prior to fiscal 2023 that are unvested as of year-end | $119,569,569 | $5,874,063 |
CHIEF EXECUTIVE OFFICER PAY RATIO
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CHIEF EXECUTIVE OFFICER PAY RATIO
(continued)
CHIEF EXECUTIVE OFFICER PAY RATIO
| Add (subtract) year-over-year change in fair value of equity awards granted prior to fiscal 2023 that vested during fiscal 2023 (from prior year-end to vesting date) | $24,807,722 | $2,082,408 | | Subtract fair value of any awards outstanding as of end of fiscal 2022 that were forfeited during fiscal 2023 | | $(720,928) | | Add, for incremental cost associated with modification of outstanding vested stock options in fiscal 2023 | | $126,522(7) | | Total Adjustments | $159,486,573 | $15,139,961 | | Compensation Actually Paid | $189,834,854 | $33,308,296 |
CHIEF EXECUTIVE OFFICER PAY RATIO
| For purposes of the foregoing adjustments, the value of equity awards was determined as follows: (i) for RSUs, the closing price of our common stock on the fiscal year-end date, or, in the case of vesting RSUs, the closing price of our common stock on the applicable vesting date; (ii) for stock options, a Black Scholes value as of year-end or the vesting date(s), as applicable, determined based on the same methodology as used to determine grant date fair value but using the closing share price on the applicable revaluation date, and the market price volatility, expected remaining life and risk free rates, each as re-measured as of the applicable revaluation date, and where applicable, taking into account the incremental fair value, calculated in accordance with ASC Topic 718, of any material modifications that occurred during the fiscal year, and (iii) for unvested PRSUs as of fiscal year-end, the estimate of the most probable aggregate compensation cost to be recognized over the requisite service period determined as of fiscal year-end under ASC Topic 718, calculated using a Monte-Carlo simulation model and based upon a discounted cash flow analysis of the probability-weighted payoffs of a share-based payment assuming a variety of possible stock price paths and for the 2022 and 2023 PRSUs (see footnotes to Outstanding Equity Awards at 2023 Fiscal Year-End table for more information). |
CHIEF EXECUTIVE OFFICER PAY RATIO
| (4) Our total shareholder return is calculated, for each fiscal year, as the cumulative total shareholder return on our common stock from December 29, 2019 (i.e. the first day of our 2020 fiscal year), through the last day of the applicable fiscal year, assuming that $100 was invested beginning December 29, 2019. |
CHIEF EXECUTIVE OFFICER PAY RATIO
| (5) Our peer group is comprised of the component companies of the S&P 500 Index Semiconductor & Semiconductor Equipment Index (the “Peer Index”) for each applicable fiscal year. The total shareholder return for our peer group is calculated, for each fiscal year, as the cumulative total shareholder return of the Peer Index from December 29, 2019 (i.e. the first day of our 2020 fiscal year), through the last day of the applicable fiscal year, assuming that $100 was invested beginning December 29, 2019. |
CHIEF EXECUTIVE OFFICER PAY RATIO
| (6) Reconciliation of GAAP net income to non-GAAP net income (in millions): |
CHIEF EXECUTIVE OFFICER PAY RATIO
| Quarter Group | Year Ended | | | | | Quarter End Date | December 30, 2023 | December 31, 2022 | December 25, 2021 | December 26, 2020 | | GAAP net income | $854 | $1,320 | $3,162 | $2,490 | | Loss on debt redemption/conversion | — | — | 7 | 54 | | Non-cash interest expense related to convertible debt | — | — | — | 6 | | (Gains) losses on equity investments, net | (1) | 62 | (56) | — | | Stock-based compensation | 1,380 | 1,012 | 379 | 274 | | Equity income in investee | (16) | (14) | (6) | (5) | | Acquisition-related and other costs* | 262 | 521 | 42 | 14 | | Amortization of acquired intangible assets | 2,811 | 3,548 | — | — | | Release of valuation allowance on deferred tax assets | — | — | — | (1,301) | | Income tax provision | (988) | (945) | (93) | 43 | | Non-GAAP net income | $4,302 | $5,504 | $3,435 | $1,575 |
CHIEF EXECUTIVE OFFICER PAY RATIO
| * Acquisition-related and other costs primarily comprised of transaction costs, purchase price adjustments for inventory, certain compensation charges, contract termination and workforce rebalancing charges. |
CHIEF EXECUTIVE OFFICER PAY RATIO
| (7) The amount reported reflects (a) the incremental fair value, determined in accordance with ASC Topic 718, associated with the extension of the exercise period of Mr. Kumar’s outstanding vested stock options to two years following his termination date pursuant to the terms of his Retirement Transition Agreement with the Company, divided by (b) five (i.e., the number of non-CEO Named Executive Officers for fiscal 2023). |
Relationship Between Compensation Actually Paid and our Total Shareholder Return
Relationship Between Compensation Actually Paid and our Total Shareholder Return Our stock price performance is the predominant factor that determines whether the Compensation Actually Paid to our named executive officers is at, above, or below the amounts reported in our summary compensation tables. The Compensation Actually Paid directly correlates with our total shareholder return (“TSR”) since most of our executive compensation is delivered through long-term equity awards in the form of PRSUs, RSUs, and stock options which vary in value with changes to our stock price. The chart below compares the Compensation Actually Paid during the 2023, 2022, 2021 and 2020 fiscal years to our cumulative TSR since December 29, 2019 (the last day of our 2019 fiscal year), measured as of the last day of each of those fiscal years.
Relationship Between Compensation Actually Paid and our Total Shareholder Return
| ADVANCED MICRO DEVICES, INC. | 2024 Proxy Statement | 87 |
Relationship Between Compensation Actually Paid and our Total Shareholder Return
(continued)
Relationship Between Compensation Actually Paid and our Net Income (GAAP and
Relationship Between Compensation Actually Paid and our Net Income (GAAP and
ITEM 3—APPROVAL ON A NON-BINDING, ADVISORY BASIS OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”)
| • | Pay-for-Performance is Important. The Compensation Committee places a strong emphasis on performance-based compensation. To this end, approximately 96% of Dr. Su’s and 92% of the other Named Executive Officer’s aggregate total direct compensation opportunity (i.e., base salary, annual target cash performance bonus opportunity and target value of annual long-term equity awards for 2023) was in the form of a cash performance bonus and long-term equity awards. |