According to a Reuters source, AMD CEO Dirk Meyer was forced out after concern mounted that he had no vision for AMD's mobile strategy. The board reportedly felt AMD was missing out by not developing technologies for the mobile market. Meyer even voiced his hesitance to invest in mobile publically. In October he told analysts that AMD would hold off on investing in mobile architectures until the market grew larger. This sort of talk clearly did not help his case. As soon as competitor Nvidia blew up CES with Tegra 2 mobile chips, Meyer was gone.
The source said it was Meyer's stubbornness on the issue that lead to the hasty removal. A more flexible CEO might have been able to placate the board more, but Meyer was set on forging ahead with Netbooks and other x86 chips. With ARM-based mobile devices from Apple and Google taking over mobile computing for millions, it is no surprise the AMD board was nervous about Meyer's direction.
Only time will tell if this move was right or not. AMD took quite a stock price hit, and this has sparked concerns that the chip-maker could be on the decline. Do you think AMD can put together a competitive mobile strategy, or did they miss the boat?
Perennially beleaguered chip maker AMD announced Monday that Dirk Meyer is no longer the company’s CEO. Until it finds a permanent replacement, Chief Financial Officer Thomas Seifert will serve as the firm’s acting CEO. The abruptness of Meyer’s resignation has left a lot of room for speculation. AMD’s perfunctorily terse explanation hasn’t helped either. Meyer’s resignation was the result of a mutual agreement between the board and the former CEO was all that the company was willing to say.
"Dirk became CEO during difficult times. He successfully stabilized AMD while simultaneously concluding strategic initiatives including the launch of GlobalFoundries, the successful settlement of our litigation with Intel and delivering Fusion APUs to the market,” said AMD chairman Bruce Claflin about the former CEO’s accomplishments.
"However, the Board believes we have the opportunity to create increased shareholder value over time. This will require the company to have significant growth, establish market leadership and generate superior financial returns. We believe a change in leadership at this time will accelerate the company's ability to accomplish these objectives."
Speculation is rife that Meyer’s failure to gauge the growing importance of the mobile market could have been a major reason for his ouster. Under Meyer, AMD adamantly refused to shed its inexplicable apathy towards increasingly important device segments like netbooks, smartphones and, most recently, tablets.
Oracle's chief executive Larry Ellison recently said his company would like to make some acquistions in the technology sector, adding that a microchip company would look mighty fine in Oracle's portfolio. Could AMD be a target? Would the world's No. 2 chip maker even be open to buyout? The answer to both questions is 'maybe.'
"AMD is not for sale, but we are happy to listen to any proposal which is in the interest to our shareholders," chief executive Dirk Meyer said during an industry conference in Barcelona this week.
Shares of AMD haven't exactly been scintillating as of late, but the chip maker hopes to turn that around with the introduction of its Fusion chips, which integrate graphics onto the CPU. The company is also facing increased competition from ARM, though Meyer said he doesn't really view ARM as a threat to its bottom line.
Something tells us AMD's CEO, Dirk Meyer, will still be able to foot the bill at one of Gordon Ramsay's restaurants if he decides to eat there, but nevertheless, Meyer's total compensation in 2009 dropped by 15 percent.
To put that number into perspective, Meyer received compensation in fiscal 2009 valued at $4.5 million. A king's ransom, sure, yet still less than the $5,3 million he receive in 2008.
If you're wondering about his salary, Meyer is paid $792,685 per year, plus a $45,000 bonus, NetworkWorld.com reports. The bonus is considered a one-time payment given to Meyer and other AMD employees to supplement base salaries, and this was decreased (temporarily) by 15-20 percent in 2009 as well.
As a company, AMD's revenue dropped by 7 percent last year, yet it was the first time AMD reported a net profit ($304 million) since 2005.
AMD's struggles have been well documented ever since forfeiting the performance crown to Intel, but perhaps all the company needed was a swift kick in the rump. That appears to be what the company's getting with newly inaugurated Dirk Meyer at the helm serving as AMD's CEO, who had no qualms announcing that his company has initiated a pilot production of microprocessors using a 45nm fabrication processor. That puts the Santa Clara chip maker on track to deliver shipping products in volume in early fourth quarter.
"We are well on track with the 45nm plan as we have been telling this group about in the past. We have actually started production late last quarter and are on track to start buying shipments early in Q4," said Dirk Meyer during the conference call.
That has to be good news to nervous investors, who earlier this month saw their stock fall by as much as 7 percent following news that AMD would take a near billion dollar charge in the second quarter. And while Hector Ruiz's subsequent departure just days later might have signaled to some that the end was near, Meyer's confidence in AMD's ability to stay on schedule with its 45nm plans has to be appreciated by anyone pulling for the Intel competitor (which should be everyone). Before the announcement, analysts were expecting 45nm shipments to start in late Q4, and nobody seems to know what exactly AMD has planned as part of its refocusing strategy. A compelling alternative to Nehalem, perhaps? Let's hope so.
The man who has been perched atop AMD’s corporate hierarchy since April, 2004, and overseen the company’s horrendous streak of six consecutive quarterly losses – still unbroken, has stepped down as AMD’s CEO. Hector Ruiz will now be replaced by, Dirk Meyer, heir apparent to AMD’s throne of thorns. But he won’t leave AMD altogether and will don the role of executive chairman.
Had AMD advertised for this job instead of roping in Dirk Meyer straightaway, the advertisement would have carried a warning: this job carries a great – possibly grave - risk of hypertension and nervous breakdown, please, apply at your discretion.
Dirk Meyer held the reigns of the team that developed the first Athlon processor and has served as the company’s president and chief operating officer. Leading AMD is a job that will currently find very few takers and so Mr.Meyer might need your best wishes