News & Analysis
New IBM CEO sees her salary doubled
Sylvie Barak
2/3/2012 10:00 PM EST
SAN FRANCISCO-- The new CEO of International Business Machines Corp. (IBM) has had her salary doubled from $800,000 to $1.5 million according to a regulatory filing.
Virginia Rometty was promoted to the role of IBM CEO at the beginning of the year, from her previous position as senior vice president and group executive for sales, marketing, and strategy. She is the first woman to lead IBM in its 100 year history, and was recently voted seventh in Fortune Magazine’s "50 Most Powerful Women in Business", having made the list seven consecutive times.
An electrical engineer by education, Rometty graduated from the Robert R. McCormick School of Engineering and Applied Science at Northwestern University in 1979 with high honors, receiving a bachelor's degree in computer science and electrical engineering. She went on to work for General Motors, before joining IBM as a systems engineer in 1981.
In addition to her $1.5 million salary, Rometty, 54, will get a cash-incentive target of $3.5 million for 2012, compared with her $1.47 million target bonus in 2011, according to an SEC filing.
To achieve her bonus, Rometty must successfully carry through with IBM’s five-year plan to push software sales to make up half of the company’s earnings. The firm also has plans to zero in on business analysis tools, cloud computing and emerging markets.
Previous CEO and current IBM president Samuel Palmisano received a $6.5 million bonus in 2011.
Virginia Rometty was promoted to the role of IBM CEO at the beginning of the year, from her previous position as senior vice president and group executive for sales, marketing, and strategy. She is the first woman to lead IBM in its 100 year history, and was recently voted seventh in Fortune Magazine’s "50 Most Powerful Women in Business", having made the list seven consecutive times.
An electrical engineer by education, Rometty graduated from the Robert R. McCormick School of Engineering and Applied Science at Northwestern University in 1979 with high honors, receiving a bachelor's degree in computer science and electrical engineering. She went on to work for General Motors, before joining IBM as a systems engineer in 1981.In addition to her $1.5 million salary, Rometty, 54, will get a cash-incentive target of $3.5 million for 2012, compared with her $1.47 million target bonus in 2011, according to an SEC filing.
To achieve her bonus, Rometty must successfully carry through with IBM’s five-year plan to push software sales to make up half of the company’s earnings. The firm also has plans to zero in on business analysis tools, cloud computing and emerging markets.
Previous CEO and current IBM president Samuel Palmisano received a $6.5 million bonus in 2011.
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Bert22306
2/5/2012 7:28 PM EST
Her salary doubled as a result of a promotion to the CEO position. It did not double, say from one year to the next, while she was holding the position of CEO. So, I don't see anything strange in this.
Besides which, a CEO of a major US corporation, who makes $1.5M, is probably something to be considered "amazingly good value for a CEO," these days. Hardly the absurd figures we see bandied about often.
If CEO salareies were limited to, say, 10X of what their employees make, I'd consider that a return to sanity.
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Another Guy
10/23/2012 5:06 PM EDT
So, how many people do you know that makes $150,000 a year. I would like that job. A very small percentage makes more than $75,000/year in IBM. That is 20X less or 5% of what the CEO of IBM is making. That is a LOT more than the taxes that she might be paying.
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Luis Sanchez
2/6/2012 12:17 AM EST
Impressive numbers! But I think those numbers must reflect the quality of the person and the results that he or she can give back.
A CEO must have great leadership skills and a clear vision of the direction the company must head. If the vision is effective, then the company will rise in sales and earnings will increase. That is why a CEO can make such high salaries.
But, this is also slightly unusual considering now that to avoid taxes, some CEO's have a salary of 1 dollar a year and instead of that a big lot of stock options.
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resistion
10/23/2012 11:02 PM EDT
You still have to pay taxes when cashing out the options. But options do give you some flexibility to effectively set your own income.
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elctrnx_lyf
2/6/2012 1:30 AM EST
IBM is doing many great things behind the scenes after they sold out their laptop division. Their concentration on services have increase their profits in a big margin and chunk of this is going to CEO.
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chrisnfolsom
2/6/2012 6:02 AM EST
Perhaps my view is a bit jaded by the influence in my life of IBM in the 80's and 90's, but it is amazing to me that there are people in many other occupations with much less responsibility and experience who make much more in compensation than the CEO of IBM.
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SylvieBarak
2/6/2012 2:59 PM EST
You know what, I actually hadn't thought about it this way, but you're right.
Bert is also right that it's not, relatively speaking, a huge sum... It's a huge sum to mere mortals like us though. She obviously worked and fought hard to get to where she is, I think she's a role model for many young female engineers, and I applaud her.
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t.alex
2/11/2012 9:26 AM EST
Role model is the right word. Really admire her.
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goafrit
2/7/2012 8:19 PM EST
That is too small I must point out. Where is the extra "0"?
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larkforsure
2/10/2012 11:39 PM EST
[ Begging for Life] Complaint about IBM China Human Rights Violations, and Palmisano Knows It
Please Google:
IBM detained mother of ex-employee on the day of centennial
or
How Much IBM Can Get Away with is the Responsibility of the Media
or
Tragedy of Labor Rights Repression in IBM China
or
IBM Advised to Treat its People with Humanism in China
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Data Doctor
5/27/2012 6:54 PM EDT
At $11.50 per employee per year for her salary with bonus, IBM got her cheap.
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sprite0022
10/23/2012 10:54 PM EDT
more responsibility -- more anxiousness --shorter life,
so she got what she deserves,
consider Steve Jobs, dead at 50+,
bill gates much smarter, give up all the burden and still alive...
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