The applause may become deafening later but for now the investment market is giving the cold treatment to the top executive change at Advanced Micro Devices Inc., perhaps in recognition of the fact that Dirk Meyer's replacement of Hector Ruiz as CEO probably won't result in any radical changes at the microprocessor vendor.
The company's stock price slipped more than seven percent in after hour trading following the announcement, to $4.95 from the closing price of $5.30. The decline could be a sign investors weren't thrilled with Meyer's appointment. It could also be a response to the weaker-than-expected second quarter results AMD reported earlier.
After eight and a half years with the company, Ruiz is hardly stepping aside despite the new CEO appointment. The semiconductor industry veteran is staying on at the company as executive chairman and chair of the board of directors, guaranteeing his vision for the company would remain the basic roadmap under the new CEO.
By securing the appointment of his handpicked successor, Ruiz is further assured AMD won't be making any radical changes to the reorganization initiatives being implemented at the company even as it continues to pile up losses and as its market value declines in response to previous manufacturing problems.
Meyer, a 12-year veteran of the microprocessor and graphic IC vendor, is taking over the top executive function at the company at a time it is struggling with mounting net losses, eroding market share and an ongoing reorganization that's meant to help AMD recover grounds lost to market leader Intel Corp.
The company said the appointment of Meyer, 46—and until the latest move president and chief operating officer of AMD—was part of a succession program it initiated two years ago.
"Dirk is a gifted leader who possesses the right skills and experience to continue driving AMD and the industry forward in new, compelling directions," Ruiz said in a statement.
Meyer's appointment wasn't a surprise. Ruiz had previously indicated he would be handing over the top job at AMD although his decision to stay on as executive chairman points to the likelihood the 62 years old semiconductor veteran would still be a major influential figure at the Sunnyvale, Calif., company.
Meyer has been involved in key functions at the company since being appointed head of the microprocessor business in 2001. He was named president and COO in 2006 and elected to the board of directors one year later.