Advanced Micro Names Lenovo’s Rory Read Chief After a Seven-Month Search
Advanced Micro Devices Inc. (AMD), Intel Corp. (INTC)’s largest rival in computer processors, named Lenovo Group Ltd. Chief Operating Officer Rory Read to replace ousted Chief Executive Officer Dirk Meyer.
The appointment concludes a seven-month search, slowed by rejections from leading technology executives. Read, who spent 23 years at IBM, is a “proven leader with an impressive record of driving profitable growth,” Bruce Claflin, AMD’s chairman, said today in a statement.
While new leadership will ease investor frustration, an executive with more experience in either mobile or business computers would have been a better choice, said Alex Gauna, an analyst at JMP Securities in San Francisco. Meyer was ousted from AMD in January after a disagreement with the board over the company’s failure to regain market share in server computers and move into tablets and smartphones.
“It’s a positive for the company to have anyone in the seat,” said Gauna, who has a “market underperform” rating on the stock. “The bio doesn’t inspire any optimism that a turnaround is imminent.”
Read, 49, said he wants AMD to “go faster” and take advantage of the company’s Fusion product line, which combine processors and graphics features on one chip. The company gained share in notebook computers in the second quarter with the first versions of Fusion, according to Dean McCarron, an analyst at Mercury Research.
‘Scratching the Surface’
“We’re just scratching the surface of where we need to go,” Read said on a conference call. “We need to do what we say and own what we do.”
Read has been tasked with increasing the company’s performance in its existing markets, improving profitability and developing “thoughtful” strategy to take it into new areas, Claflin said. No restrictions have been placed on what approach he can take, he said.
Oracle Corp. (ORCL) Co-President Mark Hurd;; EMC Corp. Chief Operating Officer Pat Gelsinger; Carlyle Group Managing Director Greg Summe; and Apple Inc.’s Tim Cook, set to succeed Steve Jobs as CEO, all spurned approaches from the Sunnyvale, California- based company, according to people familiar with the search.
Read, who starts immediately, will get a $1 million signing bonus and $1 million annual salary, with a 150 percent performance-related bonus, according to a filing.
Read, who has a bachelor’s degree in information systems from Hartwick College, was running Lenovo’s Americas group in 2007 when it improved profit by $140 million and sales by 14 percent, according to the personal-computer maker’s website. He was International Business Machines Corp. (IBM)’s Asia Pacific region general manager for business innovation and worked in the company’s Global Services division.
AMD Chief Financial Officer Thomas Seifert, who is serving as interim CEO and had said he didn’t want the job permanently, will revert to his previous role. The Chicago-based recruitment firm Heidrick & Struggles worked with AMD on the search.
The stock rose 11 cents, or 1.7 percent, to $6.45 at 2:17 p.m. in New York Stock Exchange composite trading. AMD shares had declined 22 percent this year before today.
Founded in 1969, AMD has less than 20 percent of the computer processor market, and the company has reported a profit in only four of the past 10 years. AMD also doesn’t make chips for smartphones and tablets -- a market that’s expanding faster than PCs.
Under Meyer and his predecessor, Hector Ruiz, AMD suffered product delays that cost it orders in the lucrative market for chips used in server machines. AMD’s share of that industry peaked at 26 percent in 2006, according to Cave Creek, Arizona- based Mercury Research. At the end of the first quarter of 2011, its share had fallen to 6.8 percent.
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