International Business Machines Corp (IBM)’s CEO Gets a Raise

Ginny Rometty, CEO of International Business Machines Corp (NYSE:IBM), received her first hike in salary ever since having taken over the mantle of the company in 2012. Not only are her monthly wages being hiked from $1.5 million to $1.6 million as IBM moves from 2014 to 2015 but she is also due to receive an incentive payout of $3.6 million as her bonus for 2014. The good news does not end there – in 2015 alone she is eligible to a bonus of $5 million which, on being added to her salary, will cause the total raise to be poised at 11%.

Dominic Chu covered the topic on CNBC and followed it up with a question mark as to whether this decision would work in favor of International Business Machines Corp (NYSE:IBM), given the unrelenting waves of trouble that have been engulfing the company since the past decade. For a company which has posted a decline in revenue for 11 quarters at a stretch with no symptoms of improvement visible on the horizon, the decision to hike the CEO’s salary seems incongruous.

International Business Machines Corp. (IBM)

On her part, CEO Ginny Rometty has taken a few tough calls, the first of which entailed abandoning Roadmap 2015 that had been chalked out by her predecessor. Its objective was to ensure that International Business machines Corp (NYSE:IBM)’s EPS touched a value of $20 and the company was trying every financial twist in the book to achieve it. Deviating from the map caused the stock to tumble in October 2014, a blow from which it is yet to recover.

Other decisions entail trimming off unprofitable businesses and taking an active interest in development of cloud computing. She has also been keen on laying off staff which implies that International Business Machines Corp (NYSE:IBM) is likely to witness a large chunk of its work-force being laid from work. This has had a demoralizing effect on employees who rated her as low as 48% in terms of approval.

This article has been written by Vinita Basu.

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