AMD's chief executive to step down in 2002
Published: 15 Feb 2001 09:24 GMT
W.J. "Jerry" Sanders will step down as chief executive officer of Advanced Micro Devices in April 2002 and hand control of the company to his hand-picked successor.
The chipmaker said Wednesday that the flamboyant Sanders, who founded the company in 1968, will serve as chief executive until the annual shareholders meeting in April 2002. At that time, the office will be handed over to Hector de J. Ruiz, AMD's current president and chief operating officer.
Although he will relinquish the title of chief executive, Sanders will serve as chairman of the board through 2003.
The transition has been expected since Ruiz came to the company from Motorola in January 2000. Ruiz's employment contract, in fact, contained a clause that entitled him to a $1.5m if AMD failed to appoint him chief executive by 2002.
Nonetheless, it will be an epoch-making moment for AMD.
For years, Sanders has been AMD personified. The company was originally going to be called Sanders Associates. Many of the company's decisions and executive hires have been made by fiat by Sanders, according to sources. When analysts and pension fund managers complained about the company, they often blamed him, and his salary was often termed excessive.
At the same time, Sanders has also been given much of the credit for AMD's successes, such as the Athlon chip.
The strong identification between AMD and its chief executive also was a result of Sanders' flamboyant personality. Among other extravagances, he owns a suit that spells his name -- Jerry Sanders -- in tiny letters in the pinstripes. His lifelike bust adorns AMD's corporate lobby. And although AMD's headquarters are in Silicon Valley, Sanders lives in a mansion in the Los Angeles area.
On a recent financial conference call, analysts wondered why he sounded as if he was speaking in an echo chamber. AMD sources later said that he wasn't in the room with the other company executives. Instead, he was calling in from vacation in Paris.
"There is such an intertwining between Jerry and AMD that it is difficult to pry the two loose from each other," said Kevin Krewell, an analyst at MicroDesign Resources. "AMD may get better respect from the financial and user community (by) losing some of the flamboyance. But the flip side is that AMD will be a much more boring company."
Krewell, who previously worked at AMD, recalled that the truly extravagant days for the company occurred prior to 1990. Then, company sales retreats took place in Hawaii and were accompanied by lavish parties. Door prizes at company parties could include huge cash awards.
But the extravagance didn't exactly disappear. At the company's 25th anniversary party in the 1990s, AMD hired Rod Stewart to sing.
As for the future, Ruiz has received high marks from analysts for his management of the company. Ruiz replaced Atiq Raza, who left AMD suddenly in July 1999. At the time, analysts believed that the company would begin to experience manufacturing or other problems. Raza, many asserted, was the executive most responsible for the company's comeback at the time.
Since then, however, AMD has continued to build on the success of its Athlon chip.
"We are extremely pleased with our plan for a seamless leadership transition," Charles Blalack, an AMD board member, said in a statement. "Jerry Sanders is one of the true visionary leaders of the semiconductor industry, and of course the driving force of AMD since its founding over 30 years ago."
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