Form 4: AMD CEO Lisa Su Boosts Equity Holdings

Advanced Micro Devices CEO Lisa Su reported significant equity transactions, including the settlement of performance stock units and new grants of stock options and performance-based restricted stock units.

Summary

• Lisa T. Su, Chair, President & CEO of Advanced Micro Devices Inc. (AMD), reported changes in her beneficial ownership of company securities.
• She acquired 125,663 shares of common stock through the settlement of previously earned and vested performance stock units (PRSUs) granted on August 9, 2022.
• Concurrently, 49,449 shares of common stock were disposed of at a price of $177.51 per share, likely for tax withholding purposes related to the PRSU settlement.
• Following these transactions, her direct beneficial ownership of common stock is 3,360,021 shares.
• She also holds indirect beneficial ownership of 908,191 common shares through various Grantor Retained Annuity Trusts (GRATs).
• A new grant of 102,516 stock options was received, with an exercise price of $177.51. These options will vest 1/4 on August 15, 2026, and quarterly thereafter until August 15, 2029, expiring on August 15, 2032.
• A new PRSU award of 151,283 units was granted, contingent on AMD's stock price performance relative to the S&P 500 Index, absolute AMD stock return, and AMD's 2027 fiscal year non-GAAP earnings per share exceeding 2025 fiscal year non-GAAP earnings per share.
• The performance period for the new PRSU award is from August 15, 2025, to August 15, 2028, with vesting generally subject to continued employment through August 15, 2028.

Sentiment

Score: 7

Explanation: The filing indicates positive executive compensation events, including the settlement of earned performance units and new grants that align the CEO's incentives with future company performance. While there's a minor disposition for tax, the overall sentiment is positive due to the long-term incentive alignment and past performance achievement.

Positives

• The settlement of 125,663 performance stock units indicates the achievement of prior performance targets, reflecting positively on past company performance.
• The new grants of stock options and performance-based restricted stock units align the CEO's long-term incentives directly with shareholder value creation and future company performance.
• The significant equity holdings, both direct and indirect, demonstrate a strong vested interest of the CEO in the company's success.

Negatives

• The disposition of 49,449 shares for tax withholding purposes slightly reduces the CEO's direct beneficial ownership.

Risks

• The new PRSU award's vesting is contingent on future stock price performance (relative to S&P 500 and absolute) and non-GAAP EPS growth, introducing variability and dependence on market conditions and operational execution.
• The actual number of PRSUs earned can range from 0% to 250% of the target, creating uncertainty regarding the final compensation value.

Future Outlook

The new performance-based restricted stock units are tied to AMD's stock price performance relative to the S&P 500, absolute stock return, and non-GAAP EPS growth through fiscal year 2027, indicating management's focus on these key financial and market metrics for future performance.

Management Comments

• The options vest 1/4 on August 15, 2026 and then quarterly thereafter until August 15, 2029.
• Between 0% and 250% of the target number of PRSUs may be earned depending on (a) the return on AMD's stock price relative to the return of each of the component companies comprising the S&P 500 Index, subject to adjustments, over the performance period that begins August 15, 2025 and ends on August 15, 2028, (b) the absolute return on AMD's stock price over the performance period, and (c) the percentage (if any) by which AMD's 2027 fiscal year non-GAAP earnings per share exceeds AMDs 2025 fiscal year non-GAAP earnings per share.
• Vesting of any earned PRSUs is generally subject to the Reporting Person's continued employment and/or service with AMD through August 15, 2028 (or the one-year anniversary of a change in control, if earlier).
• The actual number of PRSUs that may be earned, if at all, will be determined by the Compensation and Leadership Resources Committee based on AMD's actual performance with respect to the performance vesting conditions.
• Earned and vested PRSUs will generally be settled on the later of August 15, 2028, or the date following the Committee's determination of performance.

Industry Context

This filing reflects standard executive compensation practices in the technology and semiconductor industry, where performance-based equity awards are common to incentivize long-term growth and align executive interests with shareholder returns. AMD's use of relative and absolute stock performance, alongside EPS targets, is a typical approach for large-cap tech companies.

Comparison to Industry Standards

• The structure of performance-based restricted stock units (PRSUs) tied to relative stock performance against the S&P 500 and absolute stock return is a common practice among leading technology companies like NVIDIA, Intel, and Qualcomm, aiming to incentivize outperformance against broader market and direct competitors.
• The inclusion of non-GAAP EPS growth as a performance metric for PRSUs is also standard, reflecting a focus on core operational profitability, similar to compensation structures seen at companies such as Broadcom and Micron Technology.
• The vesting schedule for stock options (1/4 annually over four years) is a widely adopted industry standard, promoting executive retention and long-term commitment, comparable to practices at Microsoft and Apple.

Related Party Transactions

• Lisa T. Su holds indirect beneficial ownership of common stock through various Grantor Retained Annuity Trusts (GRATs), including 56,365 shares via Grantor Retained Annuity Trust 2021B, 156,750 shares via Grantor Retained Annuity Trust 2021C, 127,760 shares via Grantor Retained Annuity Trust LTS 2022 GRAT A, 167,316 shares via Grantor Retained Annuity Trust LTS 2022 GRAT B, 200,000 shares via Grantor Retained Annuity Trust 2025 GRAT A, and 200,000 shares via Grantor Retained Annuity Trust 2025 GRAT B.

Stakeholder Impact

• Shareholders: The equity awards align the CEO's financial interests with shareholder returns, potentially leading to more focused efforts on increasing stock price and profitability.
• Employees: The compensation structure for the CEO may set a precedent or reflect the company's overall approach to performance-based incentives for key personnel.

Next Steps

• The newly granted stock options will begin vesting on August 15, 2026.
• The performance period for the new PRSU award will run until August 15, 2028, with the Compensation and Leadership Resources Committee determining the actual number of earned PRSUs thereafter.
• Earned and vested PRSUs will generally be settled on or after August 15, 2028.

Key Dates

Keywords

Advanced Micro Devices, AMD, Lisa Su, SEC Form 4, Insider Trading, Stock Options, Performance Stock Units, Executive Compensation, Equity Awards, Corporate Governance, Semiconductors