Computer business IBM stated on March 9 that Chief Executive Samuel Palmisano was the recipient of compensation worth close to $20,000,000 in 2005. This raise came about after he helped sell IBM’s waning PC business.
In 2005, Palmisano, a 54 year-old executive was earning a salary totaling $1.68 million plus a bonus of over $5 million and an incentive of nearly $4.25 million. However, Palmisano’s compensation included 230,325 stock options that are said to be worth over $7 million. While his bonus did not change from 2004-2005, his salary did increase by over $1.5 million and his incentive pay doubled. His help with the sale of IBM’s PC business to Lenovo Group Ltd. In May of last year also earned him an extra $990,674 in restricted stock.
A company in New York, International Business Machines Corp. also noticed that according to these reported earnings, Palmisano’s own salary increase actually increased IBM’s earnings per share growth well above the company’s goals. IBM saw a 15 percent increase in operating profit last year.
Palmisano’s sale of IBM’s PC industry helped keep the company on track and helped continue its reputation of growing revenue while maintaining good financial management. With Palmisano’s guidance, the company also concentrated on strong and growing businesses and was able to acquire 16 companies that totaled $2 billion in 2005. Most of these companies fell within the software and computer services fields.
The large incentive pay Palmisano earned in 2005 accounts for the first three-year period he was CEO and chairman of IBM. He started by becoming CEO in 2002 and was appointed chairman the following year.
Added By: Computer Consulting 101