IBM CEO Getting $4.5 Million Bonus
January 28 2016 - 6:00PM
Dow Jones News
International Business Machines Corp. CEO Virginia Rometty is
getting a $4.5 million performance bonus for 2015, despite the
computer maker's ongoing financial struggles.
Ms. Rometty's total earnings for the year won't be clear until
IBM discloses the value of certain equity grants, but her bonus was
$900,000 more than the $3.6 million she earned last year. The IBM
CEO's base pay for 2016 remains unchanged at $1.6 million, with
$13.3 million in long-term incentive stock awards, the company said
Thursday in a filing with the Securities and Exchange
Commission.
Revenues at IBM have dropped for 15 straight quarters and the
company has lowered profit expectations three times since late
2014. IBM shares declined more than 15% in 2015.
IBM has struggled as the company's core hardware, software, and
services businesses have shrunk in the face of a changing climate
in corporate IT. Since taking the helm in early 2012, Ms. Rometty
has focused on next-generation businesses, such as data analytics
and security. She has also moved IBM out of its low-margin
Intel-based server business and paid Globalfoundries Inc. $1.5
billion to take over its money-losing semiconductor operations.
On a call with analysts last week, IBM CFO Martin Schroeter
lowered the company's profit guidance for 2016, but said the
company was "pleased with the progress that we made again this year
in the transformation of our business."
To analysts and shareholders, however, IBM's slide cannot stop
quickly enough. In a research note last week, Sanford Bernstein
& Co. analyst Toni Sacconaghi noted, "the company's tone on its
conference call was surprisingly (perhaps worrisomely) upbeat."
Last year, IBM awarded Rometty a $3.6 million bonus and a 6.7%
raise in base compensation. That boosted her total compensation by
38.5% to $19.3 million, despite a 12.4% drop in shareholder
return.
In 2013, Ms. Rometty and other senior managers at IBM chose to
forego their annual bonus because of the company's poor
performance.
Write to Robert McMillan at Robert.Mcmillan@wsj.com
(END) Dow Jones Newswires
January 28, 2016 17:45 ET (22:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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