On a whim a couple years ago I bought a few shares of AMD. I figured it would be interesting to receive AMD's annual report and proxy in the mail and fun to chide the “blue badges” running around town about my diversification. My diversification has been a pleasant economic success (on a very small scale) to the extent that I am embarrassed to mention it to my INTC friends with their underwater options and raises that cause them to be envious of Social Security recipients’ annual bump . . .
Alas, AMD’s annual report and proxy have arrived in the mail. The usual topics – election of directors (8) is marginally interesting and the request for a blessing of the accountants causes me to pause as I attempt to recall if this bunch had former partners on display in the post office – none recalled – and remember Stephen Frey’s description of auditors in his book, Shadow Account.
The compensation recitals . . . .non-employee directors garnering next year an annual retainer of $65,000 with kickers for chair and lead duties and options -50,000 for first-timers (doled out at a rate of 12,500 a year) and 25,000 a year for incumbents.
The CEO, three EVPs and SVP received annual compensation, bonus and stock options approximately as follows: [$950K, $1,200K & 500K], [$466K, $373K, 112K], [$506K, $310K & 125K], [$467K, $297K & 150K] [$440K, $318 & 37K]. Ho-hum . . .
Ah-hah . . . what’s this? Long-term incentive plan for executives . . . . yup, if AMD achieves “specified financial performance goals” (not specified in a convenient - findable - location for the shareholder plodding through the proxy), select executives will receive as a bonus 30-60% in annual payments of their base salary with the CEO to receive 200-400% of base salary all for the years 2004-2006. . . .then three pages about the CEO’s retirement benefits . . . short paragraph about the $2M loan to the CEO in 2001.
Yawn . . . .
Stockholder proposals . . “Your Board of Directors recommends a vote AGAINST” - electing directors by a vote of the majority of votes cast at an annual meeting. Board prefers the current plurality vote standard.
. . . “Your Board of Directors recommends a vote AGAINST” – expensing the costs of all future stock options on the Company’s annual income statement. Board prefers to wait until June 15, 2005 when FAS 123R requires AMD to expense employee stock options at fair market value. . . also, the footnotes on financial statements adequately inform shareholders of the financial impact of equity-based compensation . . . yes, I just love those helpful footnotes . . . come again?
Where’s that proxy? . . . I am headed to http://www.proxyvote.com/ . . . those footnotes have NOT been adequate – who are they kidding? Don't make me get out my magnifying glass and calculator and create a spreadsheet with guestimates of the impact - that is your job . . . besides, my crystal ball broke around the turn of the century . . .
. . . I am withholding my vote for all nominees - they only need a plurality after all, so one vote will do . . . voting for the CPA’s and hoping they raise their fees as they figure out how to make things look good while expensing the options next year . . . no long-term incentives for “select executives” if the CPA’s raise their fees high enough . . . out with the plurality and in with the majority . . . expense those options now? . . . I can wait . . . time to take my profits and run? . . . maybe next year.
Alas, AMD’s annual report and proxy have arrived in the mail. The usual topics – election of directors (8) is marginally interesting and the request for a blessing of the accountants causes me to pause as I attempt to recall if this bunch had former partners on display in the post office – none recalled – and remember Stephen Frey’s description of auditors in his book, Shadow Account.
The compensation recitals . . . .non-employee directors garnering next year an annual retainer of $65,000 with kickers for chair and lead duties and options -50,000 for first-timers (doled out at a rate of 12,500 a year) and 25,000 a year for incumbents.
The CEO, three EVPs and SVP received annual compensation, bonus and stock options approximately as follows: [$950K, $1,200K & 500K], [$466K, $373K, 112K], [$506K, $310K & 125K], [$467K, $297K & 150K] [$440K, $318 & 37K]. Ho-hum . . .
Ah-hah . . . what’s this? Long-term incentive plan for executives . . . . yup, if AMD achieves “specified financial performance goals” (not specified in a convenient - findable - location for the shareholder plodding through the proxy), select executives will receive as a bonus 30-60% in annual payments of their base salary with the CEO to receive 200-400% of base salary all for the years 2004-2006. . . .then three pages about the CEO’s retirement benefits . . . short paragraph about the $2M loan to the CEO in 2001.
Yawn . . . .
Stockholder proposals . . “Your Board of Directors recommends a vote AGAINST” - electing directors by a vote of the majority of votes cast at an annual meeting. Board prefers the current plurality vote standard.
. . . “Your Board of Directors recommends a vote AGAINST” – expensing the costs of all future stock options on the Company’s annual income statement. Board prefers to wait until June 15, 2005 when FAS 123R requires AMD to expense employee stock options at fair market value. . . also, the footnotes on financial statements adequately inform shareholders of the financial impact of equity-based compensation . . . yes, I just love those helpful footnotes . . . come again?
Where’s that proxy? . . . I am headed to http://www.proxyvote.com/ . . . those footnotes have NOT been adequate – who are they kidding? Don't make me get out my magnifying glass and calculator and create a spreadsheet with guestimates of the impact - that is your job . . . besides, my crystal ball broke around the turn of the century . . .
. . . I am withholding my vote for all nominees - they only need a plurality after all, so one vote will do . . . voting for the CPA’s and hoping they raise their fees as they figure out how to make things look good while expensing the options next year . . . no long-term incentives for “select executives” if the CPA’s raise their fees high enough . . . out with the plurality and in with the majority . . . expense those options now? . . . I can wait . . . time to take my profits and run? . . . maybe next year.
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