2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 316 2.17.4 Compensation mix Investors are very interested in the relative mix of performance-based (“at risk”) compensation, versus guaranteed compensation, with investors preferring that a majority of compensation be performance based. Previously displayed in dense tabular and narrative discussions, explanations are increasingly furnished through a range of different graphical representations. Please note that while many companies consider traditional stock options to be “performance based,” most investors and their proxy advisors do not, unless the options vest according to the achievement of specific performance criteria rather than simply time-based vesting. Pay-mix graphs are among the most frequently employed graphs within proxies. 2018 NOTICE OF MEETING AND PROXY STATEMENT CompensationDiscussionandAnalysis (continued) Key Features of Fiscal 2017 Executive Compensation Program Our fiscal 2017 executive compensation program continued to reflect our longstanding commitment to reward pay for performance that aligns with and drives stockholder value. The key features of our fiscal 2017 executive compensation program were as follows: • Redesigned Performance-Based Restricted Stock Unit (“PRSU”) Awards . We redesigned the PRSUs granted to our Named Executive Officers in fiscal 2017 (the “2017 PRSUs”) to provide for payouts based on our performance against three performance measures over a three-year performance period: (i) our total stockholder return (“TSR”) over the performance period relative to the TSRs of each of the companies comprising the SOX, (ii) our absolute TSR over the performance period, and (iii) our stock price performance during the last year of the performance period. In addition, the 2017 PRSUs are subject to an award cap that limits the dollar value payable (in shares) to the Named Executive Officers pursuant to these awards. As a result, the 2017 PRSUs (which made up 50% of the target value of our Named Executive Officers’ fiscal 2017 long-term incentive compensation) are structured to promote and reward delivery of sustained stockholder returns (both absolute and relative to the SOX comparator companies) over the three-year performance period. Further discussion of the design of our 2017 PRSUs is provided below on page 44 under “Fiscal 2017 Compensation Elements—Long-Term Equity Awards—2017 PRSU Awards.” • Pay for Performance . As illustrated in the tables below, the fiscal 2017 target total direct compensation (defined below) delivered to our Named Executive Officers was heavily weighted towards performance- based compensation: • 91% of our Chief Executive Officer’s target total direct compensation and 83% of the average target total direct compensation of our other Named Executive Officers’ was delivered in the form of performance-based compensation; • Long-term equity awards represented approximately 78% of our Chief Executive Officer’s target total direct compensation and 65% of the average target total direct compensation of our other Named Executive Officers; and • 100% of the fiscal 2017 target annual incentive bonuses payable to our Named Executive Officers was tied to the achievement of pre-established annual financial and operational goals, which are aligned to our short-term and long-term objectives, as reflected in our annual operating plan. Chief Executive Officer 9 % F i x e d 9 1 % V a r i a b l e Base 9% Bonus Target 14% PRSUs 39% RSUs 19% Stock Options 19% Average of Other Named Executive Officers 1 7 % F i x e d 8 3 % V a r i a b l e Base 17% Bonus Target 17% PRSUs 32% Stock Options 17% RSUs 17% As used in this Proxy Statement, a Named Executive Officer’s fiscal 2017 “target total direct compensation” is the sum of his or her fiscal 2017 base salary, target annual incentive bonus under our Executive Incentive Plan (“EIP”), and the aggregate intended target value of the long-term equity awards granted under our 2004 Equity Incentive Plan (the “2004 Plan”) (the accounting values (grant date fair value) differ and are included in the “Grants of Plan Based Awards in 2017” table below on page 58). 32 ADVANCED MICRO DEVICES, INC. | 2018 Proxy Statement Total of 02 pages in section ADVANCED MICRO DEVICES, INC.