March 29, 1999 5:10 PM PST
Digital's Palmer may join AMD board
- Related Stories
-
AMD tries to placate stockholders
March 10, 1999
Palmer has been put forward as a candidate for a new, ninth seat on the board by the company, according to the proxy statement filed by AMD with the Securities and Exchange Commission. No other candidates for the new seat appear on the ballot.
While Palmer is a well-known figure in the industry, his past association with AMD may draw complaints that he is a personal friend and past business ally with members of current management. The election will take place on April 29 in New York.
The proxy statement meanwhile also provided details on the compensation package earned by AMD's flashy chief executive W.J. "Jerry" Sanders. Last year, Sanders pulled in $1,803,097 in compensation, a total which includes $1,000,000 in salary, $113,782 in-kind compensation for company provided vehicles, and $96,061 in physical security services. Merit bonuses were not given to AMD's upper executives, because the company posted a loss of $104 million for the year, although small amounts were given out under a cash profit sharing plan.
Sanders did not receive stock options in 1997 or 1998, but he received 2.5 million of them the year before.
Despite the losses, 1998 was something of a banner year for AMD. The company landed a number of contracts with major computer vendors and saw its market share grow steadily in the retail segment despite manufacturing setbacks toward the end of the year. In 1997, Sanders pulled in $2,347,557. The company only lost $21.1 million that year, but could boast of almost no deals with major PC makers.
Although Palmer's candidacy for the board will likely pass, it seems destined to at least raise some token protest. AMD is appointing a ninth director to the board as part of a compromise solution with the Teachers' Insurance and Annuity Association and College Retirement Equities Fund (TIAACREF). TIAACREF earlier this year launched a movement to remove two of the current eight board members, claiming that the current balance contained too many company directors that were company insiders, which it defined as persons with financial or personal ties to AMD.
AMD disputed the allegation. To placate TIAACREF, however, AMD said it would create a ninth board seat to be occupied by an outside director.
Whether Palmer is an outsider or an insider will be the likely basis of the debate. Palmer is not technically an insider because he has not worked at AMD and presumably does not have financial interests in the company. Nonetheless, Palmer had dealt with AMD while he was Digital's CEO. Digital was the first major PC vendor to adopt AMD's K6 processor for its computers in early 1997. Shortly afterward, Digital filed an acrimonious intellectual property lawsuit against Intel.
The two current board members that TIAACREF originally tried to oust were not employed by AMD either. One is a professor at USC and the other, Joe Roby, is the chief operating officer of Donaldson, Lufkin & Jeanrette.
Palmer helped organize the sale of Digital to Compaq in January 1998. During his tenure, Digital largely reported losses or relatively modest gains.
