Rometty's total compensation for 2014 was $19.3 million, mostly from about $12.5 million in restricted stock grants, according to documents filed Monday with the SEC. While IBM says she took home $0 in a "bonus," it also says she took home $3.6 million from her "non-equity incentive plan compensation" which is basically a bonus.
This pay package is up from nearly $14 million she made in 2013. That was the year that IBM stumbled and she and her senior staff voluntarily turned down the money known as the "non-equity incentive plan compensation." Most of her pay came from $11.7 million in stock grants.
As we previously reported, IBM has already given her a raise for 2015. Her base salary has been boosted by $100,000 to $1.6 million, and she'll get $13.3 million in restricted stock units. And she's eligible for a bigger $5 million bonus in 2015.
"Today we are building upon this foundation to create an entirely new generation of critical systems," said Rometty.
"IBM's clients are unclogging city traffic, exploring a cure for cancer, improving the safety of food supplies, reducing risk, and serving their own customers, employees, citizens and patients with greater levels of understanding, personalisation and intimacy.
"A new world is taking shape before our eyes, remade by data, rewritten in code and growing smarter every day."
Still, it's easy to be happy when you're paid $19.3m a year. This is the figure that IBM paid Rometty in 2014 through a mixture of cash and stock, according to Business Insider.
She forwent a bonus, but accepted a $3.6m "non-equity incentive plan compensation". Which is a little like going for a bowl-water bowel release scenario instead of a poo.
Some 110 people want to leave the company with a big fat cheque, which is way more than the ten per cent of the division’s 736-strong workforce that IBM had in mind.
The voluntary redundancy process is “coming to an end”, one insider told us. “Staff have applied for the package, some will get an offer, others won’t.” ...
Rather unhelpfully, Big Blue told the group “offers will be made on the voluntary selection criteria determined by the business”. That’s about as clear as CEO Ginny Rometty’s plan to replace tumbling revenues from the classic business with technology that is sold as a service.
The ECC also asked why job cuts are required when the Message Queue and Integration Bus products in the wider division are profitable, and the risk this poses to future deliveries.
“Transactional revenues is predicted to decline and a result an appropriate revenue plan has been booked. The business model must be optimised to realign to this new plan,” IBM told ECC.
“The objective is to realign the business’s costs to business objectives," said Big Blue, adding that it has already taken measures to help it meet targets, outside of redundancies.
“All business areas have tightly controlled expense management systems in place” to help it meet top and bottom line forecasts, it said.
“Spending and travel restrictions have been implemented to manage costs. These are property portfolio projects which are ongoing and are aimed at reducing overall occupancy costs across IBM UK,” the response to the ECC states. ...
Voluntary redundancy programmes were already run in marketing and Global Business Services prior to Christmas, and both were heavily oversubscribed. IBM told the ECC recently that it could seek out redundancies in the same departments again this year.
We asked IBM for comment but it rolled out the same paragraph it has since the restructure began. We give you:
“IBM continues to rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high value segments of the IT industry.”
These all seem like good signs. But there's a problem - one that means investors are better off going elsewhere for yield...
IBM has a long history of making big promises to its shareholders. In 2005, former IBM CEO Sam Palmisano promised IBM would hit $10 earnings-per-share in 2010. And Palmisano, by cutting around the corners and increasing margins, delivered.
But we also saw the current CEO Virginia "Ginni" Rometty go back on a 2010 Palmisano pledge to achieve a 2015 EPS mark of $20. Continued challenges in sales growth may well force Rometty to further dim the optimistic picture for IBM shareholders.
Whether that's by scaling back IBM's large buyback program or cutting dividends, there's no guarantee that flagging IBM sales won't tarnish IBM's reputation as a shareholder-friendly stock. ...
That's why IBM knows it needs to have a bigger presence in the growing market for cloud computing and Big Data services to offset losses in legacy businesses. But IBM is far from an early mover in these areas. It's merely competing at this point, it's not setting the standard in IT architecture like it once did....
IBM's competition in both growth initiatives includes Amazon.com Inc., which has more room to maneuver because it is hardly as concerned with preserving high margins. And that goes without mentioning the slate of tech start-ups and small software companies that can roll out Big Data and cloud services without the kind of huge, slow-moving bureaucracy that has long hindered IBM on the innovation front. ...
The Bottom Line: What investors need to understand if they're going after Big Blue solely for the IBM dividend or the buybacks is that these payouts are not stemming from a healthy company. Yes, IBM does have a long history of pleasing shareholders. But the company is in trouble. There are plenty of high-yield dividend stocks to buy that don't find themselves in the same quandary as IBM.
The two-bedroom, 2½-bathroom unit boasts views of the Empire State Building and the East River.
That’s part of the substantial business case for flexible working arrangements (lest you thought bosses were offering them out of the kindness of their hearts). A 2013 Stanford study found that employees working from home were 13 percent more productive than their office-bound colleagues, taking fewer breaks and succumbing to fewer distractions. At IBM, remote employees reported they could work 57 hours a week before throwing their work-life balance out of whack, whereas office employees reported that conflicts began to emerge at the 38-hour mark.
Employers actually spent less on premiums between 2011 and 2012. But at the same time, they asked workers to spend more.
And that’s not the only way companies are asking their workers to pay more. Deductibles have marched steadily upward over the past decade. Even after adjusting for inflation, the CAP analysis finds they have doubled from $1,240 for family coverage in 2002 up to $2,491 in 2013.
Pros: Literally the only pro I can think of at IBM is that it is a well-known company with a good (although inaccurate) reputation. However, that reputation is starting to sour in order to reflect the company's modern day business dealings. In all other instances, it pales compared to other firms.
Cons: You will never get a raise. When you ask your manager why you have not received any sort of raise in two years (not even an inflation adjustment), be prepared for them to respond that they have not received any sort of raise in an even longer amount of time.
Advice to Senior Management: Hold yourselves accountable for the companies dwindling performance. When strategy is not working, be flexible and willing to change. Realize that you are the problem.
Advice to Senior Management: Be more open with your employees, warts and all if need be. Hiding important information only creates a culture where people are anxious and uncertain about their future career. When you withhold info, rumors spread in the lower ranks and general distrust of upper management becomes more widespread. It's costing the company some of its best people and it needs to stop.
Pros: IBM allows you to have access to fantastic resources and pockets of deep technical excellence. Some of the people I have worked with have been visionary and inspired technical leaders.
Cons: Finance seems to be running the show. Dubious business decisions are made on the basis of financial data only, without regard for technical or marketing strategy.
Advice to Senior Management: Quit trying to drive everything to defined financial KPI's. Focus on exposing your technical excellence, and the revenues will follow. Too often things are done in response to IBM organizational bureaucracy, rather than in response to customer needs or market needs.
Pros: Higher-level philosophical purpose (to be essential), excellent marketing campaigns (Smarter Planet), smart people and great talent, diverse set of capabilities and offerings to solve practically any problem, great brand name.
Cons: Too self-serving as opposed to client-focused at times, bureaucratic and process focused in managing business, leadership detached from employees and their needs, any person is one quarter away of loosing their jobs based on stock performance.
Advice to Senior Management: Pay closer attention to developing people and aligning them with the right roles. Allow for more movement of people across brands for a more enriching career growth. Put the client first in structuring contracts and make it easier to do business with IBM.
Pros: They have a core of incredibly competent people.
Advice to Senior Management: Hard working, loyal people were what made IBM great. You've forgotten that.
Pros: There is nothing to say good.
Advice to Senior Management: People are not resources or an IBM serial number.
Advice to Senior Management: Make the changes that are needed, time is running out.
Pros: If you're looking to escape to Austin and the middle of Texas for cheap, go for it.
Cons: Lots of omissions and lies about what the state of company actually is. It hasn't been the era of the Eames for decades and even when those legend designers were hired, they were brought on as famous contractors with a blank check, not the for-cheap designers that are being hired en masse as a work force. You won't have their impact.
Workplace is dull and tired. Terribly designed office, despite the aim of the organization it supports. Most startups with mediocre incomes can support better perks, benefits, salaries...and cool projects. Some IBM offices are thrilled to offer free coffee for an hour a day! Meanwhile smaller companies offer free lunches, gym memberships, cleaning services, and higher salaries. Don't sell yourself short on a nice interview dinner.
Austin is great, but Texas is only for some. Don't move here from a big city, unless you're looking to settle down.
The management is more of a survival class than a meritocracy. Most people expect respect because of how long they've lasted, not because of what they can do — that makes for a corporate culture that is overwhelmed with bureaucratic, safe, risk-averse behavior and very little desire to follow even brilliant design ideas.
There are challenges in your career that will build character, growth, and fortitude in a designer.... and then there will be challenges like IBM that forever remind you what not to do ever again.
Advice to Senior Management: Get out.
Pros: Ability to work from home, wonderful set of employees and manager with expertise to learn from, global operations. Amazing breadth of enterprise software products and services.
Cons: In major transition so very challenging place to work, low morale. Major reorg just took place. Culture is reactive instead of proactive so lots of fire drills to respond to. Many managers are too focused on tactical activities and addressing action items, unable to focus on longer-term plans and activities. Endless meetings, reviews and approvals. Not a good place to work for young people.
Advice to Senior Management: Have much clearer lines of responsibility and hold executives accountable! Invest in systems that provide real metrics to measure success and business results. Decisions are subjective and not based on data. Managers should have 360-degree reviews where employees can provide feedback to improve manager skills.
Advice to Senior Management: Declining sales for 12 consecutive quarters...look at cutting your sales people OR challenge them to be diverse and work with different individuals on proposal.
Pros: You are surrounded by the smartest people in the world. This is the first job I had where I didn't feel like I was working with a bunch of idiots. It was fun to work on developing the latest and greatest technology.
Cons: Everyone is always worried about the next RA. 1st line managers hands are tied. Executive leadership is very short sighted.
Advice to Senior Management: Lower management needs to fight harder for their employees, and not just respond to executive direction with "Thank you sir. May I have another?" Company needs to spend money on something other than stock buy-backs.
Pros: Good training courses in the first half of the year. Exceptional co-workers. Big ticket clients and projects. Career opportunities for graduates are great if you don't mind getting underpaid for years.
Advice to Senior Management: Enough redundancies! The depth of knowledge in the consulting business is being drained.
That is to discourage you to file for unemployment insurance. This saves IBM some bit of insurance premium for unemployment insurance. If you are retired; you don't count as unemployed. And that makes IBM managements RA agenda not look as bad as it really is.
Retirement eligible? Sure. Retirement designated? NOOOOOOOOO!!! Your IBM manager is the typical stooge and only doing what IBM HR wants him to do. YES, YOU determine when you want to RETIRE; NOT IBM. Who the h&%$ does IBM think they are??? They have the nerve and flaunt it. If you want to pursue further you'll need a lawyer. If so, good luck! You'll need it going against the Perry Masons IBM has for litigation. It's not impossible to win against IBM but it is possible. -Anonymous-
By way of example, prior to working for IBM I was let go by a former employer after 17yrs of service. Before I left IBM via the 2013 TTR program, I was eligible for and began collecting my pension from that former employer. However, that employer did not consider me as retired from them and was not eligible for any other retirement benefits. Yet after leaving IBM, I was eligible for IBM’s retirement benefits since I met all their requirements (rule of 65, etc). So it’s reasonable that IBM considered me retired when I left.
After leaving IBM, I immediately applied for and was accepted for unemployment, even though I told them I was collecting a pension and that IBM considered me retired. But that did not make me ineligible for unemployment. Collecting a pension and being on unemployment are not mutually exclusive. However, keep in mind that unemployment is reduced by your pension amount.
So, if you have documentation/evidence from IBM that supports your being let go through no action on your part, you should have no trouble with unemployment, even if you begin collecting your IBM pension, get IBM retirement health insurance fully paid for by your FHA, AND even if you are collecting SS. -2013TTR-
The posts on the job cuts are so tiring. Same old stuff. Blah, blah including coming back to IBM as a contractor after being fired (you are NOT laid off, you are fired period). Why would you work for this company again with the crap they shovel to employees. Look for someone that appreciates your contributions.
The IBM I worked for was great (bridged out 1993, retired in 1997), that all changed with "Cookie Man" in the early 90s. During the 70s I told coworkers that we were treated very nicely because IBM did NOT want unions. Darn it all, I was right.
Show some courage for crying out loud and join this Union so you have some power, the corporate elitists hold all of the power in IBM, I joined because I am a retiree and they continue to chip away at retiree benefits. I am sure they would delete my pension if they could do that to save money, IBM corp elitist managers are greedy period, they do NOT give a rats a$$ about you or I. They are terrible greedy supposedly humans, period (may they all go to HE!! if there is an afterlife). Everything about them and nothing for the rest of us. Truly sick greedy supposedly humans. -Tomv1997retiree-
We who were laid off end of first quarter 2014 were told we would receive the GDP payout. But one month later with a callback to the manager we were told that the company had reversed its decision and we would not receive the GDP after all. It was only between $1000 and $2000, but at least it was better than any "raises" some of us received during the prior 10 years and it would have been put to good use to pay the full Alliance dues for years to come.
Despite this some of us continue to pay the full dues since the Alliance inception. PLEASE, PLEASE wake up and drive new membership numbers above the current number! PLEASE, PLEASE show some moral courage and demonstrate at the stockholder meetings. Be at least true to your US heritage!! -A Proud Progressive American-
It is like 11 consecutive bad quarters with no real revenue growth and still it is in the Dow Jones index? Roadmap 2015 a total bust. A CEO and Sr. VP team that is still out of touch with IBM business and strategy that gets rewarded monetarily for bad results and bad strategy. Tactically IBM $ucks too; more never-ending talent dropping RAs. IBM is not a true indicator of USA business climate and as a trend setter anymore. Appears NASDAQ has to realize it. The "I" in IBM is still for 'international' where IBM hides its troubles when it should now be standing for INNOVATION. IBM is a follower and not a leader. It is amazing IBM can get credit and loans to float and IBM hides red ink in favor of blue ink (IBM fuzzy non-GAAP financial engineered accounting reporting)
I wonder if the IBM Stockholder's Meeting will give the usual increase to the dividend since I don't think IBM can afford to give a higher dividend. I can't see how they can even try to justify a stock buyback (but they always try). I can only think that when Berkshire Hathaway is 'happy' with the IBM stock it has acquired it is only because of the stock dividend. AT&T has been or will soon be dropped by S&P I believe. IBM might not be that far behind being dropped from the S&P index as well. -Buffetted-
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