Analyst On AMD's Executive Bonuses: 'Unbelievable'

In a report published Wednesday, Bernstein analyst Stacy A. Rasgon maintained an Underperform rating and price target of $1.50 on

According to the Bernstein report, "Last night after the close AMD filed an 8-K2, outlining new, sizeable equity awards made to the senior executive team. These equity awards are a mix of performance-based restricted stock, time-based restricted stock, and stock options." The amounts of the grants are similar to that awarded in August 2014, despite the business having "fallen apart over the last year," the report added. However, these awards could be part of the company's retention plan, given that the analyst does not believe that the management team needs to be rewarded for performance at this stage. However, CFO Devinder Kumar and CTO Mark Papermaster have already been awarded retention bonuses in January 20, while GM of EESC Forrest Norrod and CEO Lisa Su took over their position less than a year ago. "We suppose this could also be one last-ditch effort to "align management incentives with shareholders," but at this point it seems far too late for that," Rasgon said. Following layoffs earlier in 2015, the company is working on additional cost cuts in order to bolster the balance sheet, even as the business appears to be collapsing. "As such, we find these types of large payments, once again, to be extremely distasteful," Rasgon stated. The analyst believes that the size of these grants indicate that the management and the Board of Directors do not have the interests of the shareholder at heart, while viewing these grants as a sign that things are continuing to worsen at AMD. "AMD is at a tipping point, with their core PC business under significant pressure from a weak market and increasingly poor competitive position," Rasgon added.