IBM chief Virginia Rometty's bonus down to zero as revenues fall
11 March 2014
International Business Machine Corp chairman, president and CEO Virginia Rometty took home $13.97 million in 2013, as against the $16.2 million she took home in 2012, documents filed with the SEC show.
Rometty's base pay did not change at $1.5 million, though cash bonus under IBM's annual performance-based incentive programme was down to zero from $3.9 million last year, thanks to a revenue decline as also in related cash flow in 2013.
The company, explaining the move said "in view of overall results, Mrs Rometty and her senior team recommended forgoing their annual incentive payout for 2013."
Similar trends were also seen in the compensation for other named executives in IBM -- chief financial officer Mark Loughridge, senior vice presidents JE Kelly, RC Weber and Steven Mills.
In January, IBM sold its low-end server business recording a 4.6 per cent decline in revenue in 2013.
According to Rometty, the company fell short of expectations last year and would need to address its struggling hardware businesses.
''We must acknowledge that while 2013 was an important year of transformation, our performance did not meet our expectations,'' Rometty, who is also chairman, said in a letter to investors in the company's annual report. ''While we continue to remix to higher value, we must also address those parts of the business that are holding us back.''
IBM had found it difficult to transition to the cloud era, where data and information are delivered online rather being stored onsite. Declining hardware demand as also weak sales in growth markets had slowed down revenue for the last seven quarters.
Rometty responded to the situation with asset sales, cutting workforce, share buybacks and tax cuts to help meet profit goals.
In an announcement today, the company said Michael Eskew, the former chairman and CEO of United Parcel Service Inc who had been on the IBM board since 2005, would become the company's first presiding director on 1 May.
In a regulatory filing, the company said, in the newly created position, Eskew would serve as a liaison between the chairman and independent directors and would be able to call meetings of independent directors.