NEW YORK (AP) — The value of the pay package for IBM's chief executive, Sam Palmisano, rose 19 percent in 2010 from a year earlier to $25.2 million, thanks to a near-doubling of his performance-based bonus as the company surpassed a profit goal it set in 2007, according to an Associated Press review of a securities filing.
In justifying the pay bump, International Business Machines Corp. cited in Monday's filing its annual net income per share of $11.52, above the goal of $10 to $11 it set in 2007, and almost triple the level in 2000. The company is aiming for $20 per share of operating earnings in 2015.
It also noted that dividends rose to $3.2 billion in 2010 from $2.9 billion a year earlier, and that the company bought back $15.4 billion in shares.
IBM announced and integrated 17 acquisitions worth $6.5 billion during the year, including nine in the business analytics and process optimization space. The company has gradually focused more of its business on software and services and less on making hardware.
Its share price rose 14 percent in 2010, ending the year at $146.18 on Dec. 31, up from $127.94 a year earlier.
Palmisano, 59, is also chairman and president. He saw his salary unchanged at $1.8 million, while the value of stock grants made in January of last year was $13.3 million, down 1 percent from the previous year's batch of stock grants.
But his performance-based bonus rose to $9 million from $4.8 million in 2009.
All other compensation, including company contributions to retirement plans, personal use of company aircraft and personal security fell 3 percent to $1.1 million.
The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year.
It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, making the AP total different in most cases than the total reported by companies to the Securities and Exchange Commission.