Advanced Micro Devices’ (NYSE: AMD) chairman, Bruce L. Claflin, has been on the chipmaker’s board since 2003. He has chaired the board since early 2009. For some odd reason, he was appointed executive chairman of the board in early 2011, and held that job until the company found a new chief executive officer. Claflin has been a member of the board over the course of the sharp downturn in AMD’s fortunes, and over a period in which the firm has had a succession of CEOs, with the tenure of two marked by disaster.
CEO Dirk Meyer left AMD in January 2011. Then it took the board a very long time to appoint Rory Read, who joined AMD in September of last year. That transition might be in the normal course of business, but another change in CEOs was not.
Back in 2006, AMD CEO Hector Ruiz was allowed to buy graphics giant ATI for $5.4 billion. Claflin then had been on the board for three years. The deal resulted in failure and saddled AMD with a level of debt it could not support. But Ruiz remained until July 2008, after AMD had posted seven quarters of losses. The board stayed with his expansion strategy even though it was clearly flawed at the start.
Claflin has been paid well as AMD has fallen apart, and he continues to do well. The firm’s latest proxy shows that he made $751,203 in 2011. Not long after the proxy was issued, AMD announced its second-quarter results. It posted revenue of $1.41 billion, an 11% sequential decrease and a 10% decline year-over-year. Net income dropped to $37 million from $61 million in the same quarter a year ago. AMD shares nose-dived, which was another leg down on a five-year stock price drop of 70%.
Through all of AMD’s problems and missteps, Claflin has been a constant. It is amazing he remains on its board.
Douglas A. McIntyre