UPDATED: See lengthly explanation below.
Apparently blessed with the best salary-negotiating skills in the universe, AMD CEO Hector Ruiz is getting a raise.
After spending most of Thursday apologizing to financial analysts for AMD's performance in 2007, the company revealed in a filing with the Securities and Exchange Commission that Ruiz's compensation agreement was amended on Wednesday with his new salary: $1,124,000. Earlier this year, AMD said Ruiz made $1,046,358 in base salary (click for PDF) during 2006, with a total compensation package for the year of $12,848,435.
AMD's stock is down 60 percent in 2007. The company is about to write off some "material" portion of the $3.2 billion in goodwill it assigned to the acquisition of ATI Technologies, a sign that the company way overpaid for the graphics chip maker in 2006. AMD's decision to favor Dell over channel partners when it came to chip distribution backfired when Dell ran into all of its problems, dooming AMD to a $611 million first-quarter loss. And Barcelona, the quad-core processor AMD spent years hyping, won't arrive in any kind of major volume until the first quarter of next year due to a series of technical glitches.
But other than that, AMD's board of directors must have figured that Ruiz had a pretty good year. The move should allow Ruiz to remain the highest paid CEO among his peers in the semiconductor industry on Forbes' annual list of CEO pay next year.
UPDATED: 12/14: So as you might imagine, AMD called back today about this story.
It turns out that a senior member of AMD's public relations staff erred when confirming Thursday afternoon--prior to publishing this report--that Hector was given a raise this week. The raise in question actually came last year, and the $1,046,358 in the proxy statement reflected that Hector spent part of 2006 making $950,000, and part of 2006 making $1,124,000. Hector's annual salary rate has changed slightly since then, but by just $24,000 or so to reflect a different accounting treatment of a car expense.
Why did the SEC filing with the new rate come out yesterday, and not 18 months ago? They're not sure. Why did the representative and the people he spoke with not know how much money their boss was making? Also a good question.
But in any event, that's how this all happened. And Ruiz is still the highest-paid CEO in the semiconductor industry.
The "complicated" design that AMD chose for Barcelona, its first quad-core server processor, caused more than six months of delays before the chip was ready, CEO Hector Ruiz told the San Jose Mercury News.
In an interview published in Sunday's Mercury News (the excerpts don't seem to be online yet), Ruiz said "every time we ran into a gotcha (or a technical glitch), it created a six-week-or-so hole in the schedule as we went back and fixed it. We hoped we wouldn't get many of those, but in the Barcelona case, we got more than we thought. By the time we got through fixing them all, we were six months-plus later from where we originally wanted to be."
That's been a very difficult six months for AMD, as its server division suffered through a price war without a fresh new product to parade before server buyers.
The September launch of Barcelona will come six months later than AMD had hoped, according to its CEO, Hector Ruiz.
(Credit: AMD)AMD chose to put four processor cores on a single piece of silicon when creating Barcelona. The company thinks that this will deliver better performance than Intel's method of building a quad-core chip, but it was trickier to implement. Intel simply put two dual-core chips together in a single package, and while that won't win any awards from chip design purists, it did allow Intel to ship quad-core chips in November of last year. Barcelona is only now shipping to AMD's partners, and it will be formally launched on September 10, Ruiz confirmed.
The delay, along with Intel price cuts, forced AMD to significantly discount the prices of its dual-core server chips to compete and eroded its profits. You have to wonder whether AMD could have released a packaged quad-core chip months ago while still working on Barcelona if it had bit the bullet and given up on its "native quad-core" marketing strategy.
That might have erased AMD's biggest advantage over Intel: the integrated memory controller it uses to deliver a fast pipeline between the processor and system memory. And given AMD's manufacturing constraints late last year while waiting for its new 65-nanometer facility to come online in Dresden, packaged quad-core chips might not have been feasible.
But you've got to think that AMD would have loved to have any kind of quad-core design out earlier this year, so it could have competed against Intel's Xeon chips without having to resort to bargain basement pricing. And that might have been worth further delays to Barcelona, even though Intel is getting ready to launch its second-generation quad-core Penryn chip before Thanksgiving.
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