March 10th, 2009
IBM CEO took home nearly $21 million in 2008
IBM’s chairman and chief executive, Sam Palmisano, received a compensation package valued at nearly $21 million in 2008, only slightly higher than the year before, according to calculations by the AP via a regulatory filing by IBM yesterday.
In the filing, IBM’s board praised th company’s “very strong” performance despite the rocky economy. (IBM’s profit jumped 18 percent to $12.3 billion in 2008, helped by better margins in software and services.)
In the face of the economic downturn, IBM’s corporate customers continue to invest in software and services — by outsourcing or automating some of their tech chores, like managing payroll — as a way to save money.
But IBM is a big company, and not all of its parts are immune: In particular, hardware sales took a hit as corporations put off buying new servers and mainframes.
IBM shares fell 2.7 percent Monday to $83.48 but rebounded slightly today to $84.69. (Shares have traded between $69.50 and $130.93 during the past year.)
As for Palmisano, the 57-year-old chief took home $1.8 million in base salary, the same as in 2007; however, he managed a performance-based cash bonus of $5.5 million, which was $500,000 above his target for the year.
His perks totaled $1.4 million, including $493,881 for expenses incurred on personal travel on the company’s private plane, dividend equivalents of $453,397 on restricted stock, and $412,000 in company contributions to defined contribution plans.
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.
Palmisano’s total pay package was valued at $20.97 million in 2008, according to the AP’s calculations. In 2007, his compensation was $20.91 million, and in 2006 it was $18.77 million, also according to the AP’s calculations.
Here are more highlights from the company’s 2008 annual report:
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.
IBM’s annual shareholder meeting will be held April 28 in Miami Beach, Fla.
Andrew J. Nusca is an associate editor for ZDNet and SmartPlanet.
See his full profile and disclosure of his industry affiliations.
