What was the rationale for voiding and then re-granting equity awards to Dr. Lisa T. Su?

The initial awards were voided and rescinded due to a stockholder derivative action alleging that the company had granted equity awards to Dr. Su in excess of the per calendar year individual share limit under the 2004 Equity Incentive Plan. Rather than litigate this technical issue, the company chose to void the awards. Subsequently, the Board reaffirmed Dr. Su's overall compensation package as appropriate and then re-granted modified equity awards to restore her compensation to the intended level, subject to the plan's terms.

What were the performance metrics for the 2014 cash bonuses?

The annual cash performance bonuses were based on the Company's performance against four pre-established Company-wide financial measures: adjusted non-GAAP net income, revenue, adjusted non-GAAP free cash flow, and adjusted non-GAAP gross margin. These measures were evaluated over two semi-annual performance periods, with the first half weighted at 33.0% and the second half weighted at 67.0%.

Were there any conditions attached to the payment of the 2014 cash bonuses?

Yes, the payment of any cash performance bonuses for fiscal year 2014 was contingent upon the Company having a cash balance (including cash, cash equivalents, and marketable securities) of at least $600 million on the last day of each quarter of fiscal 2014. AMD confirmed that it exceeded this cash balance requirement for all four quarters of 2014.

How will the performance-based restricted stock units granted to Dr. Su be earned?

The performance-based restricted stock units will be earned based on achieving a pre-established target level of adjusted non-GAAP operating income plus interest expense over a two-year performance period (January 1, 2014, to December 31, 2015). The number of earned units can be adjusted further based on AMD's total shareholder return (TSR) relative to the S&P 500 IT Sector TSR over the same period. Earning at or above the 75th percentile of TSR results in 125% of the initial award, while performance between the 25th and 75th percentile results in a proportional adjustment.

AMD 8-K: Leadership Changes

Summary

This 8-K/A filing from Advanced Micro Devices Inc. (AMD) details executive compensation decisions made in early February 2015. A significant portion of the report focuses on the annual cash performance bonuses awarded to named executive officers for fiscal year 2014, which were set at 33.0% of their respective target opportunities and were contingent on the company maintaining a minimum cash balance throughout the year. This filing also amends a prior report to clarify the circumstances surrounding the voiding and subsequent re-granting of certain equity awards to CEO Dr. Lisa T. Su. The company rescinded performance-based and restricted stock unit awards to Dr. Su in late 2014 due to a perceived violation of share limits under the 2004 Equity Incentive Plan. However, following a stockholder derivative action and reassessment, AMD has re-granted modified equity awards to Dr. Su. These new awards include 50,000 restricted stock units and a target of 1,475,000 performance-based restricted stock units, aiming to restore her equity compensation to its previously intended level.

Key Highlights

1AMD awarded annual cash performance bonuses for fiscal year 2014 to its Named Executive Officers, with amounts ranging from $165,825 to $248,135 for current executives.
2The CEO, Dr. Lisa T. Su, received a cash bonus of $248,135.
3Bonuses were based on achieving specific financial metrics (adjusted non-GAAP net income, revenue, free cash flow, and gross margin) across two semi-annual performance periods, weighted 33.0% for H1 and 67.0% for H2 2014.
4Payment of bonuses was contingent on AMD maintaining a minimum cash balance of $600 million each quarter in 2014, a condition that was met.
5The filing amends a previous report to address the voiding and rescission of certain 2014 equity awards granted to Dr. Su, initially due to potential violations of the 2004 Equity Incentive Plan's share limits.
6AMD has re-granted equity awards to Dr. Su, including 50,000 restricted stock units and a target of 1,475,000 performance-based restricted stock units, to partially restore her equity compensation.
7Former CEO Rory P. Read was also approved for a cash performance bonus of $495,000 for fiscal year 2014, as per his separation agreement.

ADVANCED MICRO DEVICES INC 8-K/A Report, Executive Changes (Feb 18, 2015)

Summary

Key Highlights

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