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IBM's outgoing boss Rometty awarded $20m+ in 2019 for growing revenue 0.1%

Oh, she also took 'industry-leading role in AI' and found someone to replace her

Ginni Rometty was awarded $20.16m for her final full year as CEO, president and chairman at IBM as the organisation reported a gargantuan revenue rise of 0.1 per cent.

According to the 2020 Notice of Annual Meeting & Proxy Statement, filed with the US Securities and Exchange Commission, Rometty was paid a £1.6m base salary that was unchanged from recent years.

In addition, she received a bonus of $11.61m, up from $10.8m in 2018; $109,106 for a "change in retention plan value"; and $967,778 for a "change in pension value".

Topping it all off was $873,935 for what IBM termed as "all other compensation". Last year this included the money that was notched up by Rometty's business travel including use of the corporate jet and being chauffeured around, and came in at $1.1m.

Rometty's total remuneration package at $20.16m was 15.2 per cent higher than a year ago.

IBM's financial years track the calendar year and the company ended 31 December 2019 with revenue of $77.1bn, lower than the $79.4bn target IBM set itself.

One fifth of the exec compensation package was weighted by group revenues – changed last year – so IBM considered that 97 per cent of the top line goal was met. From 2015, IBM had judged revenue success on growth of Strategic Imperatives (cloud, analytics, mobile social and security). IBM generated $27bn in cloud revenue in 2019, including a contribution from Red Hat.

Some 40 per cent of Rometty and her execs' total financial incentive was based on operating income, and in this respect IBM reported $11.4bn in operating profit, versus a $12.3bn forecast. Another 40 per cent of compensation targets was related to operating cashflow, which IBM reported as $14.3bn at year end – 87 per cent of the $16.5bn targeted.

IBM said Rometty's objectives included "delivering a second year of revenue growth at constant currency excluding divestitures, achieving top tier customer satisfaction (net promoter score) levels, and transforming IBM's portfolio for sustainable performance in 2020 and beyond through the historic Red Hat acquisition and divesting non-strategic businesses."

The Compensation Committee said it also took into account her "exceptional personal leadership in several areas": this ranged from taking an "industry-leading role shaping a socially responsible approach to AI"; "record results in IBM's diverse leadership representation"; R&D in quantum computing and AI: and "preparing society for future work with new approaches in education and apprenticeships".

Oh and lest we forget, the committee also said that Rometty's work with the board to "develop a world-class succession process, culminating in naming Arvind Krishna as IBM CEO and Jim Whitehurst as president, effective April 6" was also a factor.

Rometty remains exec chairman for the rest of this year and the board has "made no change" to her base salary or target annual incentives. But the percentage of her annual total target compensation tied to performance will rise from 69 per cent to 92 per cent.

"A significant portion of the total package remains at risk and based on company performance, with only 8 per cent of pay delivered as base salary that is not at risk," said IBM.

Rometty wasn't alone in making a fortune in 2019: Jim Kavanagh, senior veep and CFO, was handed $7.14m, up from $5.89m in 2018; and Martin Schroeter, senior veep of global markets was awarded $10.2m, up from $7.03m.

Talk of exec fatcats will, of course, not in any way outrage the employees at IBM's GTS or GBS divisions that are embarking on yet another round of job cuts. ®

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