International Business Machines Corp. (NYSE:IBM) has been among the worst performing stocks in 2014, with the stock dropping more than 14% of its value in the year. The company’s performance was not upto the mark in the last two years and the senior executives of the company opted not to take their annual bonuses due to the poor performance of the company in 2013. But, did the company performed well in 2014 for its CEO to get a boost of salary and annual bonus. CNBC’s Dominic Chu talked about the compensation package of International Business Machines Corp. (NYSE:IBM)’s CEO Ginni Rometty on CNBC.
Chu reported that International Business Machines Corp. (NYSE:IBM)’s CEO Ginni Rometty will receive an annual bonus of $3.6 million for the company’s performance in 2014. He added that she also received a salary of $1.5 million for the same period.
“For 2015, the company IBM will boost her salary by 6.7% to $1.6 million and her target bonus be $5 million. Again, this is a 25% increase for what her target bonus was last year. All incentive parameters must be met to get that full $5 million amount. She is also going to receive $13.3 million worth of IBM stock in the form of a performance stock grand, that is going to cover the years 2015, 2016 and 2017. If all performance metrics are realized, she would receive that full stock grand payable in the year 2018,” Chu reported.
Chu said that Rometty will receive a salary and target bonus increment by 6.7% and 25% respectively for 2015. He added that she need to meet the performance metrics in order to full avail that target bonus. He pointed out that she will also receive International Business Machines Corp. (NYSE:IBM) stock worth $13.3 million in 2018, if she meet the performance targets for 2015, 2016 and 2017.
Chu pointed out that this is Rometty’s first salary hike since she took over as CEO of International Business Machines Corp. (NYSE:IBM) in 2012. He mentioned that it is a little controversial that International Business Machines Corp. (NYSE:IBM)’s CEO is receiving a performance bonus inspite of the fact that International Business Machines Corp. (NYSE:IBM) is among the worst performing stock in DOW. He added that International Business Machines Corp. (NYSE:IBM) stock is down 14% in 2014, whereas the S&P 500 has gained 11% in the same period. International Business Machines Corp. (NYSE:IBM) stock has dropped 4% since beginning of this year.
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