IBM is going through some rough times these days, but its board seems happy with the fix-it plans laid out by chairman and CEO Ginny Rometty, if her rising compensation is any indication.
Rometty’s total compensation for 2014 was $US19.3 million, mostly from about $US12.5 million in restricted stock grants, according to documents filed Monday with the SEC. While IBM says she took home $US0 in a “bonus,” it also says she took home $US3.6 million from her “non-equity incentive plan compensation” which is basically a bonus.
This pay package is up from nearly $US14 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 $US11.7 million in stock grants.
As we previously reported, IBM has already given her a raise for 2015. Her base salary has been boosted by $US100,000 to $US1.6 million, and she’ll get $US13.3 million in restricted stock units. And she’s eligible for a bigger $US5 million bonus in 2015.
$US19.3 million is not an over-the-top salary for the person in charge of one of the biggest, most venerable tech companies in the world, and a highly profitable one at that. Plenty of other CEOs earn millions more.
But things are not smooth for her. She’s leading IBM through one of its epic transitions. All of its its core businesses are declining in revenues and IBM has been selling off business units and laying off workers in response.
Earlier this year, Rometty made the tough-but-necessary choice to abandon the company’s Roadmap 2015. That was a promise made by her predecessor to hit $US20 EPS by 2015. The stock tumbled on that news in October and hasn’t recovered.
Last month, she revealed a new roadmap: She’s investing $US4 billion to grow a whole new crop of businesses.
These businesses, which include cloud computing, big data/analytics, enterprise mobile/social and computer security brought in about $US25 billion in revenue last year (27% of of the company’s revenue). She wants them to become $US40 billion in combined annual revenue by 2018, or 40% of the company’s expected revenue.
She’s actually got a solid, common-sense plan to get there but she still has to get there. Investors likely won’t jump on board until she starts delivering that top-line growth.