2018 Guide to Effective Proxies

2.17.5 Elements of pay tables | 347 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 2.17.5 Elements of pay tables Executive compensation is a complex topic, with most companies employing a range of vehicles to deliver value to those executives in a position to significantly impact company performance. The elements of pay are typically discussed at length, primarily in narrative, over a series of five-to-15 pages in the CD&A. Prior to a lengthy and in-depth discussion, companies are increasingly summarizing key elements of pay in one-page tables, indicating each pay element, its purpose, how it’s earned (including any relevant performance metrics) and even a page reference to where each element is discussed in additional detail. Providing such a table can help bridge the gap between the pay-mix graph, which summarizes the relevant mix of pay elements, and the subsequent lengthy narrative discussion. 2018 NOTICE OF MEETING AND PROXY STATEMENT CompensationDiscussionandAnalysis (continued) Fiscal 2017 Compensation Elements The Compensation Committee determines the elements of compensation we provide to our Named Executive Officers. The principal elements of our fiscal 2017 executive compensation program, their objectives, and the factors influencing the amount ultimately provided to our Named Executive Officers, are as follows: Element Description Objective Factors Influencing Amount Base Salary Fixed compensation delivered in cash; reviewed annually and adjusted if appropriate Provides base amount of market competitive pay Experience, market data, individual role and responsibilities and individual performance Annual Cash Performance Bonus (EIP Awards) Variable cash compensation based on performance against annual goals of revenue, adjusted non-GAAP net income and adjusted free cash flow Motivates and rewards achievement of key financial results for the year Annual target bonus opportunity determined annually based on market data, individual role and responsibilities and individual performance; payout based on Company performance and individual performance Long-Term Incentives (2004 Plan Awards) Performance- Based Restricted Stock Units (PRSUs) Variable compensation with payout in shares based on (i) relative TSR of AMD common stock over three-year performance period relative to the TSR of companies comprising the PHLX Semiconductor Index (SOX) over this three-year performance period, (ii) AMD’s absolute TSR over the three-year performance period, and (iii) AMD stock price performance as measured during last year of three- year performance period Directly aligns interests of executives with long-term stockholder value creation by linking potential payouts to relative and absolute stock price performance; also promotes retention Intended target value of all LTI awards is based on individual role and responsibilities and market data; generally, a minimum one year vesting for all LTI awards Stock Options Variable compensation based on increase in stock price from date of grant, subject to exercise of the stock option; awards vest over three years Directly aligns interests of executives with long-term stockholder value creation and provides upside potential over a seven year option term; also promotes retention Restricted Stock Units (RSUs) Variable compensation with payout in shares with time-based vesting; awards vest over three years Directly aligns interests of executives with long-term stockholder value creation and promotes retention ADVANCED MICRO DEVICES, INC. | 2018 Proxy Statement 41 Total of 02 pages in section ADVANCED MICRO DEVICES, INC.