SUNNYVALE, Calif. — Hector Ruiz has been promised at least $1.5 million by Advanced Micro Devices Inc. in the event he is not elected to replace W.J. Sanders III as chief executive officer of the company by 2002, according to company documents.
Expectations are strong that Ruiz, a longtime Motorola Inc. executive who was named president and chief operating officer of AMD in January, will eventually take the top post at AMD, but his role as heir apparent became clearer when AMD filed its annual proxy statement on March 21.
"In the event that Dr. Ruiz resigns before 2002 because the board of directors has determined that he will not become chief executive officer of AMD following our 2002 annual meeting, he will receive a lump sum severance payment equal to two years of his current annual base salary and we will accelerate the vesting of his initial option by two years," the proxy stated.
Ruiz currently has an annual salary of $750,000, and will be eligible for base compensation increases starting next year. He was also granted an option to purchase a million shares of company stock, with annual grants of 250,000 shares in following years.
Atiq Raza, who had been named president and chief operating officer of AMD in April 1999, was once considered the likely successor to 63-year old Sanders. But Raza resigned and left AMD just three months later for reasons that have never been made clear.
Ironically, the recent AMD proxy notes that Sanders was awarded $2,000,000 "for his leadership and strategic direction after assuming the role of chief operating officer in July, successfully leading the company to fourth-quarter profitability and successfully leading the project to finance and build Fab 30 in Dresden, Germany."
That bonus was in addition to Sanders' $1 million salary, plus $115,298 in the form of company-provided vehicles and $79,754 in "physical security services," along with stock options and other compensation, according to the proxy.
A shareholder's proposal will be made during the April 27 stockholders meeting to amend the company's current bylaws and require the chairman's post to be held by an outside director, a step that would require Sanders' resignation from that position. The AMD board has recommended that the proposal be rejected. A similar proposal was made two years ago by the same shareholder, who was not identified by the proxy. The company's shareholders rejected that earlier proposal.
