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Here’s a juicy bit of employee gossip about IBM CEO Ginny Rometty: If the company doesn’t hit the much promised $20 earnings-per-share target in 2015, Rometty could be shown the door.That’s a long shot, of course. IBM is killing itself to make sure it meets that number.
“Everyone knows heads will roll to make the number, on the expense side if needed or if we don’t make the revenue numbers,” one employee said. “I’ve heard banter in the hallway that if we don’t, it’s the end of Ginny.”
Goodness knows, employees are feeling the pinch of the $20 EPS goal. IBM has been laying off workers and shifting more work to regions where wages are lower, like India, employees tell us. Salespeople say that IBM is even screwing them out of their sales commissions, too, to save money. All in the name of $20 EPS.
Roadmap 2015 was not Rometty’s idea. This was a plan then-CEO Sam Palmisano put together in 2010. He did a similar thing in 2007, publishing the first long-term roadmap for investors, promising EPS in the range of $10 to $11 by the end of 2010 and overdelivering. In 2011, EPS was $13.44.
Palmisano vacated the CEO spot in January, honouring IBM’s tradition where the CEO retires at age 60. But he’s still the chairman of the board.
So far, for its first quarter in 2012, IBM reported EPS of $2.61.
UPDATED: This story originally reported the $20 EPS share target was for 2012. The target is 2015.