Despite declines, DXC Technology boss awarded $20.3m in 2023
Revenues shrank and net profit evaporated but progress made in other areas, says board
DXC Technology Chairman, President and CEO Mike Salvino was awarded a pay package of $20.3 million for the company’s recently closed financial year - the one in which sales shrank and profit evaporated
The former Accenture exec, who took over from Mike Lawrie in 2019, got a base salary of $1.298 million, down from $1.365 million in the prior year, and stock awards came in at $17 million versus $25 million. The non-equity incentive plan compensation was $1.62 million and all other compensation was listed as slightly less than $270,000.
The total haul, as outlined in a proxy shareholder statement, compared unfavorably to the $28.7 million awarded to Salvino in DXC’s fiscal 2022.
It was another tough 12 months for the organization with revenue down 11.3 percent annually to $14.43 billion for the year ended March 31. The consulting division, Global Business Services, was down 8.4 percent to $6.96 billion and Global Infrastructure Services declined 13.8 percent. DXC reported a net loss of $568 million compared to a profit of $718 million.
The financial award metrics execs were targeted on included organic revenue growth being flat year-on-year - it actually declined 2.7 percent - and nine percent growth in adjusted earning before income tax margin of 9 percent, which came in at eight percent growth.
So how did the other C-suite generals also do? CFO Kenneth Sharp was awarded $6.125 million, down from $6.218 million; HR boss Mary Finch got $3.919 million, down from $4.991 million; and COO Christopher Drumgoole got $3.47 million during his first year at DXC.
The median employee’s total annual compensation was $39,684.
“In accordance with the Pay Ratio Rule, we calculated the median employee’s annual total compensation in the same manner as the CEO’s annual total compensation was calculated in the fiscal 2023 Summary Compensation Table. Our previously identified median employee, determined using cost-of-living adjustments, resides in the Philippines. The annual total compensation of the median employee was $39,684.
“The total compensation of Mr. Salvino, our CEO, was $20,317,972, the amount reported in the “Total” column of the Summary Compensation Table. Accordingly, the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee was 512:1.
“Without the application of cost-of-living adjustments, the previously identified median employee resides in India. The annual total compensation of the median employee was $34,107, resulting in a ratio of 596:1.”
DXC was formed in 2017 by the merger of HPE’s Enterprise Servicer division, which was mostly comprised of the EDS acquisition, and CSC. Both businesses were already struggling for growth and expected their combined economies of scale to help out. In reality, the challenges remained: how to remain relevant in an era of cloud, where fewer major infrastructure field services contracts are being dished out.
Combined revenues from day one was $25 billion and the workforce was 170,000-strong. There were 130,000 employees at the end of last year.
DXC has built links with all the major cloud providers and provides a range of services to help clients digitize their processes and systems. It is trying to spin up newer growth areas faster than legacy tech revenues decline.
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In the Annual Report, Salvino pointed to revenue stability, saying GBS has grown organic revenue for 8 quarters in a row, while “cost initiatives” that focused on “staff optimization, contractors, real estate and data center and third party expenses” helped improve margins.
In a statement, DXC said the board were “pleased” with “continued progress” and the execs “demonstrated clear execution on our Transformation Journey and delivered a better culture, stronger customer relationships, an enhanced sales model and improved financial performance.”
“We are pleased that DXC’s focus in fiscal 2024 will not be fixing challenges, but delivering higher-quality revenue, and expanding Margin, Earnings per Share and Free Cash Flow to create long-term value for our stockholders.” ®