It may not be the best time to be one of the great unwashed at IBM but it certainly pays to be on the exec team, particularly if your name is Virginia Rometty.
At a time when Big Blue is cutting its cloth according to the new era of cloud, mobility, social, analytics and security by chopping thousands of job, the CEO got a bumper pay deal.
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An SEC filing showed Ginni Rometty and her generals each pocketed millions for 2014 despite the company reporting top-line declines for 11 consecutive quarters and a sliding market cap.
The filing showed Rometty took home a bonus of $3.6m (she refused one in 2013, citing disappointment at the company's output) on top of on top of $1.6m in wages and a $5m incentive target: a total cash wad of $10.2m.
In addition she was handed $13.3m worth of stock – but this will only be paid out in 2018 if sales targets are met.
Last year Rometty received compensation of $13.9m, including $1.5m in salary and $11.7m in stock options.
Not wanting her team to feel left out, chief beancounter Martin Shroeter, software and systems bigwig Steve Mills and senior veep John Kelly also received salaries averaging $723,000 each, plus an average cash bonus of $747,000 and average bonuses of $976,000.
Calendar Q4 topped off a relatively awful year for IBM. Sales slipped 12 per cent in the quarter to $24.1bn and were down 5.7 per cent for the 12 months. Net profit was down 11.3 per cent in the quarter to $5.5bn and down 27.1 per cent to £12bn for the year. The share price is down 14 per cent on last year.
As we revealed, IBM is initiating the biggest ever restructure across global ops to challenge cloud rivals as more customers demand to consume technology as they would any utility.
As a result, IBM is taking a restructuring charge of $580m for the year, which analysts calculated will translate into job cuts for several thousand people.
The bumper pay deal enjoyed by Rometty and others in the exec team have understandably gone down very badly with staff, some of whom are heading for the exit.
Workers have taken to the Alliance@IBM blog, an employee organisation, to vent their anger.
“If there is anyone left who doubts the hypocrisy and moral bankruptcy of this company just look at the huge bonuses the execs are giving themselves and compare it to the way they are treating everyone else in the organisation,” said one.
Some IBM staffers met managers last week to discover their fate, with people affected across different parts of the organisation.
We asked IBM UK for a comment but it sent us this generic statement:
“IBM continues to rebalance its workforce to meet the changing requirement of its clients, and to pioneer new, high value segments of the IT industry.
“IBM does this both at a global level, and in each market in which we operate, adapting to meet local client needs. IBM currently has about 15,000 job openings around the world for new skills in growth areas such as cloud, analytics, security, and social and mobile technologies”. ®