Palmisano also got an award of performance-based stock that was valued at $12.2 million when it was granted in May. The number of shares he actually gets will depend on IBM's performance, and they won't be handed out until Feb. 1, 2011, the company said in its filing. ...
Separate from the compensation Palmisano was awarded in 2008, he exercised 350,000 options worth nearly $15 million during the year, and had 59,764 shares worth a total of $6,610,537 vest during the year.
Ignoring for a moment the irony of a company that’s laid off 4,600 employees in the past few months professing to invest in its people, Palmisano’s remarks are quite interesting. Certainly, they’re anomalous to much of what we’ve been hearing lately. No gloom and doom from ol’ Sam, only contrarian bluster. Perhaps just enough to justify that 14 percent pay increase he accepted in 2008….
It doesn't help that the day after reporting strong quarterly earnings on Jan. 20, IBM's CEO Sam Palmisano publicly said that while other companies are making cuts, IBM would "invest in its people," and yet the very next day layoffs were announced. Weeks after the earnings call, the company has eliminated or will be eliminating nearly 4,600 jobs in North America. That's not a number easily dismissed as normal cost-cutting activity. ...
IBM isn't alone in this layoff predicament. Many companies, technology or otherwise, try and avoid press that can be construed as negative when it comes to labor relations and the elimination of jobs. But if the CEO is going to tell investors one thing, then take actions that show the opposite, it's no surprise that the spotlight is on the company right now, and perhaps IBM needs to spend some more time explaining its strategy. I imagine stockholders want a better understanding of what is going on here, as do employees who feel the company may be taking advantage of a downturn to boost numbers for the year.
As a result of the collaboration which was signed last December, IBM will be increasing the capabilities of its Manila Delivery Center, whose multilingual workforce provides services in German, French, and Spanish, in addition to English and local dialects. In turn, Sara Lee said it is will look to "drive additional cost and efficiency improvements" through the deal.
It’s starting to pay off. Example: Taiwanese software programmer David Lin paired with Danny Chen, an engineer who was born in Taiwan but works in Austin. Chen taught Lin how to develop ideas that were patentable, and Lin set up an invention team in his office and began publishing a newsletter full of tips for new inventors. Last year the Taipei lab got five patents, up from one in 2005. For his part, Chen got valuable advice from Lin on how to do business in China. ...
This program is part of the company’s strategy of creating what it calls a globally integrated enterprise. Multinationals used to operate separate businesses in each country or region. IBM now assigns work to employees all over the world, relying on widely scattered teams to collaborate. But tight collaboration doesn’t happen on its own. You have to create experiential glue to bring and keep people together.
Selected reader comments for this article follow:
In October, at the age of 58, the Santa Cruz medical information analyst was laid off, replaced by a co-worker -- "a lovely girl," half her age -- whom she had trained. "I absolutely believe it was my age," she told ABCNews.com. "We were the ones who know about hard work and have accumulated a lifetime of knowledge. ...
Finding ways to shed older employees -- who are at the top of the salary food chain and cull expensive medical and pension perks -- is nothing new, according to experts. "It's not surprising if it's happening now," said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa. "What you might see in any time when there are large-scale layoffs, is the fudge-ability increases."
"Let's face it," he told ABCNews.com. "To the extent a company may feel that it is to their advantage -- and I am not saying it's the right or wrong thing to do -- when they are making small-scale cuts, it's more difficult than when they are making large cuts. But, in the worst economy since the Great Depression, corporations have more cover to practice what some believe is outright discrimination. ...
After 25 years in the financial field, Stuart Floyd of Succasuuna, N.J., soon faces a lay-off as a project manager at a major global bank. He said he "knows for a fact" that his job is being outsourced to India. Even at 43, he is worried that he won't find comparable work. "It's my age as well as the cost," he told ABCNews.com. "The key issues are the health costs, but much more comes into play. ... It's mostly the age, even though I can't prove it.
When Globalism got traction in the mid 90s with the last building block (the Internet) that all changed as good paying jobs where shipped to the third world. So now the master of the universe think that their capital will get better return there than the developed ones and so far so good.
So with IBM almost out of the product business and into the intellectual services they are shifting the center of gravity of IBM jobs to developing countries too to arbitrage those low wages where in India you can hire five engineers to one in the USA.
Leveraging the shift in cost reduction IBM is not even half way to complete that cycle and so IBM can continue to promise returns higher than most but take note that revenue is really not growing much at all just profits from this cost reduction.
At some point in the future that transition will be over and then the fundamental problem of growing the business i.e. revenue will take over again. Actually when you look at IBM today its more like a financial company than a true services one as it "manages itself" into a higher profit margin...
Here's the takeaway - After 2012, there will be no experienced product designers and developers left in IBM, just the low cost (and low value) country based developers who due to turnover, lack the maturity, experience and skill to make quality hardware and software products, leaving IBM with extremely poor products or perhaps no products to sell at all.
Having nothing to sell, with customers leaving in droves due to poor quality and a huge number of lawsuits filed for non-performance/fraud, the IBM Corp will go bankrupt by 2015.
Only time will tell whether IBM's strategy is successful. Personally, I've got s'mores ingredients in my cupboard, ready for roasting, for the day when IBM finally implodes into a massive, global bonfire. I will celebrate the day when this disciple of Jack Welch's "Rank and Yank" management style, with an added arbitrage twist, proves to the world that the philosophy is a complete and total failure.
No one will step up to save IBM. IBM has no country. It has been as disrespectful to its disposable homeland as it has been to its disposable employees (resources … whatever). Even shareholders, who'd been appeased with profits, will turn on IBM. Their loyalty is fleeting when profits are nonexistent. There is a grass roots swell of loathing for IBM's practices. It exists and is entrenched, regardless of the media's reluctance to report on the issue, and it will be heard ... just like it was heard with Barack Obama's "surprising" victory.
There are no jobs in BTV site right now and I guess a move to another location for 4-5 months is not worth the upheaval to myself and family. I would not move my family and do not want to separate for them. I am not hopeful of finding another job within IBM where I can stay in VT.
I have read on this site that i can sign the papers, get the severance pay and then file an age discrimination complaint. I'm just wondering if anyone else has been in this situation and thought of something that helped them get this bridge that I haven't thought of yet. Thanks. Carol P.
First of all, there are laws that were written to prevent age discrimination. I saw the video about how 59% of the laid off Rochester employees are over 50 years old. IBM knows that when you are over 50, if you had the old retirement plan, the pension maximizes in your late 50's. If IBM can force you out the door early, then that is less than they have to pay you in your pension. I figure I lost 50% of the pension figure that were used to keep me employed during my 10th, 15th, and 20th year by forcing me out. I believed the managers when they told me of the great benefits of IBM. When I was a manager, I told the people I was responsible for, how great it was to be an IBMer even though the pay was 15% less than the industry.
Since Gerstner was CEO, he took the "low road" to get to the pension fund money to boost profits and give him the 20 million IBM shares he gave himself in 1998 and cashed in before 2008. He made billions from you and the other 150,000 he forced out the door with pension dollars. Remember, Randy McDOnald and the others were right there with him as the instruments of forcing people out. I am not sure how they sleep at night.
During the Gerstner years and after, some of the illegal age discrimination was challenged. The government and the courts were pretty much anti worker and pro corporations thanks to the billions of dollars annually funneled into Congress and the appointed federal judges. It was not a "worker friendly" era and the money flowed to Congressional districts where the corporations like IBM had a litigation issue with a former employee or business enterprise. All it would take is to make a phone call to the right person, a large donation or grant to a IT school and the deal was sealed. The corporations had an edge.
Today, the change in Washington is a different game. IBM might feel they are confident enough to "lay off 50 year old IBMers" with age discrimination immunity, because they have been successful in "beating the rap" before. I don't think they should be so cocky. With 59% of those laid off being over 50, they might think because they got away with it before, that they can do it again.
Well, if you think about how much money you lost in your pension IBM is taking away by forcing you out before your pension maximizes, you might rid your mind of guilt and shame and fight back perhaps. If there are more than 20 of you, over 50, and laid off, it is ripe for class action and you need to see an attorney before you sign anything. Look in the yellow pages for an employment lawyer who is NOT a corporate employment lawyer (the bad guys).
I wish you well, sorry to hear that IBM is continuing to age discriminate like it was 10 years ago. You will feel better if you fight back rather than accept the immoral activity of IBM that has been placed upon you.
The local picture isn't as positive: Hardware sales took a hit as corporations put off buying new servers and mainframes. IBM has facilities in East Fishkill and Poughkeepsie that work with chip manufacturing and mainframes. According to employees, the company cut as many as 900 jobs locally in January. IBM has not provided specific numbers. ...
Lee Conrad, national coordinator for workers' group Alliance@IBM, pointed out IBM workers in East Fishkill took a 15 percent pay cut in January and many are worried their jobs will be moved overseas soon so IBM can cut payroll expenses. "I'm sure the IBM employees aren't real happy seeing Sam Palmisano get [an] increase and a similar increase last year while employees are getting very little in terms of their own salaries," Conrad said.
“Today, I have signed two executive directives that will ensure that Michigan taxpayers are not subsidizing the export of jobs,” Granholm said. “I commend Representative Bieda and his House Democratic colleagues on their efforts to focus on how we can stop the practice of outsourcing jobs at this critical time when our economy needs every job we can provide or create for a Michigan resident.”
Companies that sank into the red last year are looking past a host of business expenses, ranging from asset write-downs to higher-than-expected operating costs, to rationalize paying brass even more than they got in flush times. Others appear to be reducing pay but continue to bestow extraordinary perks, such as “golden coffins.”
At a time when nearly 5 million Americans have applied for unemployment benefits and another 1.7 million are working part-time jobs because they can't find full-time work, immigration and outsourcing have become key political issues in the U.S. As he did during his campaign, Obama has made clear during the first weeks of his Presidency that he intends to pursue policy changes to discourage outsourcing and the use of U.S. work visas—especially H-1B visas—that could cost American jobs. At no time has he made the exact policies clear, says Altshuler. Even within the government, the changes remain a mystery. Edward Kleinbard, the chief of staff for Congress' Joint Committee on Taxation, was forced to offer up a guess about the cryptic item in the budget during a meeting with a group of international lawyers last week. "Deferral will certainly be at play," he said, according to a report in Tax Notes, a publication of the Tax Policy Center. He was referring to how corporations are able to defer paying tax on income earned overseas until they bring that money back to the U.S.
|2006||119,723* (127,000 to 130,000 estimated US IBM headcount)|
|2007||111,001* (127,000 to 130,000 estimated US IBM headcount)|
These dates are based on employees working in the US on January 1st of that year. (Officially the data is two years and two months old when we get it.)
* This is also the first full year we have had employees that had no pension plan at all (Cash Balance or the Prior Plan.) This would have been employees hired in the calendar year of 2006.
I believe 2005 was when the removal of pension plans took place, since only 140 employees were listed for that first year.
At this point in time, the number of employees on the cash balance plan are 80,460. There are 862 employees not accruing any time on the PPP. That leaves 29,679 who should still be on the prior plan as of January 1st 2007.
I think this is close, but might not be exact for the number of employees on the old plan in 1999 and then in 2007:
I also estimated(roughly) that the employees still with a cash balance plan accounts for $4.4 billion.
If President Barack Obama wants real change in American health care, he will have to get over the fear of even mentioning single-payer concepts. At his health-care summit last week, only the threat of a demonstration garnered late invitations for Oliver Fein and Congressman John Conyers, two leading proponents of the single-payer plan.
Health-care costs have become a crippling personal-finance burden for 45 million uninsured and 25 million underinsured Americans. Those outside of the fractured employer-based system are only one illness away from financial ruin. Lose your job and most likely your health coverage will disappear unless you want to pay exorbitant rates. And it’s getting worse. Because of the growing jobless rate, some 14,000 Americans are losing their coverage daily, according to the Center for American Progress Action Fund.
Delaying elective procedures can have serious medical consequences, as when a detectable polyp develops into a tumor because a patient skips a colonoscopy. Some hospitals said their emergency rooms were already seeing patients with dire conditions that could have been avoided had they not deferred surgery for economic reasons. “We’re probably seeing five or six of those a day at each of our hospitals,” said Zeff Ross, a senior vice president at Memorial Healthcare System, which operates six hospitals in South Florida. “Someone gets an attack of diverticulitis, but they wait. They get it a second time and the doctor tells them to get the surgery done now, but they still wait. The third time, it perforates and that’s a much tougher surgery, much more dangerous for the patient and with a longer length of stay.”That is the case for Jane Bagwell, a 60-year-old legal secretary in Atlanta, who has chosen to delay surgery to repair a torn rotator cuff in her left shoulder, even though she rates her pain as an 8 on a scale of 1 to 10. In a less terrifying economy, Ms. Bagwell said, she would not hesitate to schedule the operation. These days, however, she finds herself pinching every penny, including the ones that would help her pay the 20 percent share of surgical costs not covered by insurance. And given that her law firm is laying off staff members, she worries that if she took three weeks off to recuperate, her job might be eliminated before she could return. Instead, she pops ibuprofen. “I feel like I live off them,” she said.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
There are effectively two tax systems in America: one for the very rich and one for the rest of us. Income from stock dividends and capital gains, which makes up a disproportionate amount of the earnings of the very rich, is taxed at 15 percent. But the bulk of what the rest of us earn — wages and interest from savings accounts — is taxed at up to 35 percent. Though President Obama’s recent tax proposals are progressive and comprehensive, his reforms don’t do nearly enough to address this significant disparity. ...
The gap between the tax rates for the rich and the rest of us is relatively recent. Until 1921, capital gains were taxed at the same rate as ordinary income. Then Congress enacted a law that taxed capital gains at 12.5 percent while ordinary income was taxed at as much as 58 percent. In the decades since, the tax rate on capital gains varied — sometimes it increased, sometimes it decreased. But with the exception of a brief period in the late 1980s, it was always lower than the tax on ordinary income. That was not the case for stock dividends, which were taxed like wage income and savings account interest — that is, until President George W. Bush and Congress in 2003 gave dividends the same preferential treatment as capital gains. The Bush tax cuts moved our tax system too far in the wrong direction.
As Jared Bernstein, now the chief economic adviser to Vice President Joseph Biden, wrote in the preface to his book, “Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries)”: “Economics has been hijacked by the rich and powerful, and it has been forged into a tool that is being used against the rest of us.”
Working people were not just abandoned by big business and their ideological henchmen in government, they were exploited and humiliated. They were denied the productivity gains that should have rightfully accrued to them. They were treated ruthlessly whenever they tried to organize. They were never reasonably protected against the savage dislocations caused by revolutions in technology and global trade.
Working people were told that all of this was good for them, and whether out of ignorance or fear or prejudice or, as my grandfather might have said, damned foolishness, many bought into it. They signed onto tax policies that worked like a three-card monte game. And they were sold a snake oil concoction called “trickle down” that so addled their brains that they thought it was a wonderful idea to hand over their share of the nation’s wealth to those who were already fabulously rich.
America used to be better than this.
The seeds of today’s disaster were sown some 30 years ago. Looking at income patterns during that period, my former colleague at The Times, David Cay Johnston, noted that from 1980 (the year Ronald Reagan was elected) to 2005, the national economy, adjusted for inflation, more than doubled. (Because of population growth, the actual increase per capita was about 66 percent.) But the average income for the vast majority of Americans actually declined during those years. The standard of living for the average family improved not because incomes grew but because women entered the workplace in droves.
As hard as it may be to believe, the peak income year for the bottom 90 percent of Americans was way back in 1973, when the average income per taxpayer, adjusted for inflation, was $33,000. That was nearly $4,000 higher, Mr. Johnston pointed out, than in 2005. ...
It may seem like ancient history, but in the first few decades following World War II, the United States, despite many serious flaws, established the model of a highly productive society that shared its prosperity widely and made investments that were geared toward a more prosperous, more fulfilling future. The American dream was alive and well and seemingly unassailable. But somehow, following the oil shocks, the hyperinflation and other traumas of the 1970s, Americans allowed the right-wingers to get a toehold — and they began the serious work of smothering the dream.
Ronald Reagan saw Medicare as a giant step on the road to socialism. Newt Gingrich, apparently referring to the original fee-for-service version of Medicare, which was cherished by the elderly, cracked, “We don’t get rid of it in Round One because we don’t think it’s politically smart.”
The right-wingers were crafty: You smother the dream by crippling the programs that support it, by starving the government of money to pay for them, by funneling the government’s revenues to the rich through tax cuts and other benefits, by looting the government the way gangsters loot legitimate businesses and then pleading poverty when it comes time to fund the services required by the people. The anti-tax fanatic Grover Norquist summed the matter up nicely when he famously said, “Our goal is to shrink the government to the size where you can drown it in a bathtub.” Only they didn’t shrink the government, they enlarged it and turned its bounty over to the rich.
Harvey Miller, the bankruptcy lawyer who is representing what remains of Lehman, has been working hard to absolve Mr. Fuld. In a brief responding to a motion made by lawyers for the New York State comptroller, who has joined a class-action suit against the company, he wrote, “The comptroller fails to recognize that Lehman was a victim of a financial tsunami that was beyond its control.”
Now, wait just a minute here. Can it possibly be true that veteran Wall Street executives like Messrs. Cayne, Schwartz and Fuld — who were paid an estimated $128 million, $117 million and at least $350 million, respectively, in the five years before their businesses imploded — got all that money but were clueless about the risks they had exposed their firms to in the process?
In fact, although they have not chosen to admit it, many of these top bankers, as well as Stan O’Neal, the former chief executive of Merrill Lynch (who was handed $161.5 million when he “retired” in late 2007) made decision after decision, year after year, that turned their firms into houses of cards. ...
Could these Wall Street executives have made other, less risky choices? Of course they could have, if they had been motivated by something other than absolute greed. Many smaller firms — including Evercore Partners, Greenhill and Lazard — took one look at those risky securities and decided to steer clear. When I worked at Lazard in the 1990s, people tried to convince the firm’s patriarchs — André Meyer, Michel David-Weill and Felix Rohatyn — that they must expand into riskier lines of business to keep pace with the big boys. The answer was always a firm no.
Even the venerable if obscure Brown Brothers Harriman — the private partnership where Prescott Bush, the father and grandfather of two presidents, made his fortune — has remained consistently profitable since 1818. None of these smaller firms manufactured a single mortgage-backed security — and none has taken a penny of taxpayer money during this crisis.
So enough already with the charade of Wall Street executives pretending not to know what really happened and why. They know precisely why their banks either crashed or are alive only thanks to taxpayer-provided life support. And at least one of them — John Mack, the chief executive of Morgan Stanley — seems willing to admit it. He appears to have undergone a religious conversion of sorts after his firm’s near-death experience.
Some of the banks at the center of the global financial meltdown are prominent purveyors of evasion services. UBS of Switzerland has acknowledged that as of Sept. 30, it held about 47,000 secret accounts for Americans. It has refused to disclose the names of all but a tiny number of the account holders, arguing that it would be a breach of Swiss law. But last month — after UBS got caught soliciting business in the United States — it admitted to breaking federal law by helping Americans hide assets, and the bank agreed to pay $780 million in fines and restitution.
Now that I’ve been using a computer to keep patient records — a practice that I once looked forward to — my participation with patients too often consists of keeping them away from the keyboard while I’m working, for fear they’ll push a button that implodes all that I have just documented.
We have all heard about the wonderful ways in which electronic medical records are supposed to transform our broken health care system — by eradicating illegible handwriting and enabling doctors to share patients’ records with one another more easily. The recently passed federal stimulus package provides doctors and hospitals with $17 billion worth of incentive payments to switch to electronic records. The benefits may be real, but we should not sacrifice too much for them.
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