IBM chief's 2008 pay valued at nearly $21M

[Prrkitty]

http://www.foxnews.com/wires/2009Mar09/0,4670,IBMExecutiveCompensation,00.html

Quote: Palmisano, 57, got $1.8 million in base salary, the same as in 2007. He got a performance-based cash bonus of $5.5 million, which was $500,000 above his target for the year.

His perks totaled $1.4 million. That included $493,881 for expenses incurred on personal travel on the company's private plane, dividend equivalents of $453,397 on restricted stock, and $412,000 in company contributions to defined contribution plans.

Palmisano also got an award of performance-based stock that was valued at $12.2 million when it was granted in May. The number of shares he actually gets will depend on IBM's performance, and they won't be handed out until Feb. 1, 2011, the company said in its filing.

Palmisano's total pay package was valued at $20.97 million in 2008, according to the AP's calculations. In 2007, his compensation was $20.91 million, and in 2006 it was $18.77 million, also according to the AP's calculations.

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If employees could make some of the money like all these "bloated" CEO's, CFO's and etc... our economy sure would be a WHOLE lot better then it is now.

Base salary of $1.8MILLION!!! *I* don't believe anyone is worth that kind of salary... especially since most of their employees get paid shit for a salary.

<blah>

[AtmaWeapon]

Is IBM asking for bailout money, though? I don't really have problems with CEOs making bloated salaries when they run successful companies. Let's put it in perspective.

This man is responsible for 300,000 employees worldwide. He has to direct the company through a recession, and if the company fails the public will place the blame on him. His company took its biggest hit in October (http://finance.yahoo.com/echarts?s=IBM), when the stock dropped roughly 25% in response to the worsening economy. Since then, the company has remained stable. The company's laid off employees, but that's not exactly unique. If you look at his salary profile, only the 1.8 million is guaranteed; everything else is either company stock or performance-based. It makes sense that he got a good bonus for 2008 because IBM had a decent year; you don't cut a performance-based bonus because the future looks grim (my company distributed performance-based bonuses to all employees despite other cost-cutting measures for this reason; 2008 was a good year until the last quarter.)

On the other hand, look at the 2008 salary lineup for the Atlanta Braves (http://content.usatoday.com/sports/baseball/salaries/teamdetail.aspx?year=2008&team=16). Mike Hampton made $15,975,184 and what did he do? He pitched in 13 of the season's 182 games, meaning he stood in the bullpen and cheered for 93% of the season. In his 13 games, he pitched 78 innings (6 innings/game or only 2/3 of the game on average). He started all 13 of his games and finished 7 of them; of these 7 the team lost 4.

Why is it that the man who is responsible for the company that sets the table of 300,000 people does not deserve $1.8M, but a man who played 13 games of baseball and contributed to losing 4 of them deserves 10 times that?

If the ballplayer screws up, his team loses a game; if he's injured early in the season he gets a paycheck for watching a few hundred baseball games from great seats. Consistent failures can lead to cut salaries or termination, but he's made $60M since 2005; I think he'll live if he gets fired.

If the CEO screws up, he's charged with ruining thousands of lives and his career is ended. If the company folds, that $20M in stock becomes worthless; now he's got a ruined career. If we assume the performance bonus has been roughly the same, he made $29.2m (The stock options aren't cumulative; they are only worth money when he cashes them out.) in the same amount of time that Hampton made $60M, and he did it working 10-hour days throughout the year! (To be fair, Hampton had to be on the road and attend practices for most of the year. However, the MLB isn't known for emergency meetings with shareholders on major holidays or asking you to cancel vacations to make it to important games; the schedule is known well in advance.)

Unfair indeed.

[Beldaran]

Agree with Atma. I have no problem with this.

[rock_nog]

I agree with Bel and Atma on this - ridiculous performance-based payment isn't a problem at all. What's absurd is these companies who pay CEOs millions who basically just then run the company into the ground. Clearly those CEOs aren't worth what they're receiving. Not that it's any of our business or anything (though it does suck for the employees who lose their jobs over it), companies should run themselves however they see fit, and if they make bad decisions, well... those are their decisions to make.

[Archibaldo]

It's fair, sounds like he earned that money. Why shouldn't he be rewarded for hard work?

[Masamune]

I agree with Archibaldo, but not with Atma, Beldaran, or rocknog. Fuck them.

[rock_nog]

And I completely disagree with anything Masamune has ever had to say, ever! Also, the whole "head with nothing else but two feet-like appendages" thing really creeps me the fuck out.

This statement brought to you by Vodka.

[Beldaran]

companies should run themselves however they see fit, and if they make bad decisions, well... those are their decisions to make.

That's the problem with the bailouts. It rewards horrible decisions with free money. Obamanomics for the win!

[The_Amaster]

Yeah, but Bel, what if you're an employee who just lost his job because his boss a hundred tiers further up on the ladder drove the company into the ground? Should you lose your job over something you had absolutely no control over or chance to prevent?

[rock_nog]

That's the problem with the bailouts. It rewards horrible decisions with free money. Obamanomics for the win!
Don't assume the point hasn't fallen on me. I've always thought the bailout business was completely fucked up - certainly at least when I saw the consequences.

[AtmaWeapon]

Yeah, but Bel, what if you're an employee who just lost his job because his boss a hundred tiers further up on the ladder drove the company into the ground? Should you lose your job over something you had absolutely no control over or chance to prevent?Do you understand what's going on in the economy right now? Do you realize how people at every rung of the ladder are affected? If not, take some time to look for the Crisis of Credit animation and watch it. Come back when you're done.

The lenders, bankers, and investors played roulette with their money. This is the savings and investments of the little people they were playing with; the big players had almost no real money but lots of loans that promised to return. Anyway, back to the gambling. The fat cats played roulette because they had a safety net: employees. Once they got burned, they ran to the government. The government lent them money. The fat cats laid off the little people who gave them the money to gamble with in the first place.

Let's say I give you $100 and I tell you that tomorrow I'll give you enough money to make your total money $100. Are you going to invest the $100 I give you in a long-term, safe, low-yield investment and thus get $0 and $103 5 years from now? Or would you rather bet your $100 at gambling? If you gamble, you might make $1000 or you might lose $100, followed by a repayment of $100. You are a fool if you don't gamble; you have everything to gain and nothing to lose.

So, we fostered an environment where bankers can gamble with our money, and if they lose they'll get their money back. The trouble is, it's their money they get back; the poor saps who gave them the money get to hope and pray that they get some money back from the banker. This is not a good thing. It's going to prevent an economic disaster now in return for causing a bigger economic disaster in the future. I do not believe in reward without risk at the expense of others. If things were set up such that those who own a corporation were liable for damages out of their personal assets, I believe we wouldn't have had this problem in the first place. It's easy to gamble with someone else's money but it stings when you lose your own.

[The_Amaster]

...how is your example contradictory to mine? They seem to complement each other, two different smaller problems in the big main problem.

[Prrkitty]

Atma... I totally 100% agree with you. And when I posted I wasn't even thinking about the knuckleheads that play sports that make *millions and billions* for a salary - that they ain't even worth .0000000000000001% of.

An economy where sports players make that kind of money is just so stupid. It seems like it revels in the fact that they're (sports players, CEO's, Bankers, etc) stomping on the "little guys" so that they can get all they can before someone catches 'em.

And what I can't understand is why these actions/attitudes are all so tolerated. If all the sports fans REFUSED to pay the admissions to all those sports arena's... and refused to pay all the bloated prices and fees... hopefully everything/everyone would smarten up and get things right.

So basically you can't blame the sports industry for the prices... but the fault has to be placed at the feet of those actually agreeing to pay those exorbitant prices.

[Beldaran]

So basically you can't blame the sports industry for the prices... but the fault has to be placed at the feet of those actually agreeing to pay those exorbitant prices.

Why is it a "fault"? Why is it evil that people are becoming wealthy and enjoying themselves?

If the service they offer is worth value to someone else, and they are willing to pay that value, it is a rational exchange between consenting parties.

There is nothing wrong with "the system" because "the system" is really just the freedom of individuals to choose what they enjoy and what they spend their heard earned money on.

I have no problem with people getting wealthy for providing a service other people are willing to pay for.

I have a huge problem with people getting money as a reward for failing, which is what Obamanomics does.

[The_Amaster]

People may get money for failing under, as you put it Obamanomics, but the sub-clause there is that it has to be used to actually fix the problem. The money isn't going to the corporate bigwigs who ruined everything, that's the point of the salary cap. It's going to (hopefully)save a company and keep hundreds of innocent people from losing their jobs, through no fault of their own.

[Beldaran]

. It's going to (hopefully)save a company and keep hundreds of innocent people from losing their jobs, through no fault of their own.

How is it going to save the company? Does it change their business model? Does it improve their products? No. It just props them a little while longer..

It's a tragic waste of money. Only failure and the free market can stimulate a company to adapt and survive. Failure is good. It teaches managers not to be greedy and stupid. If companies are not allowed to fail, there will be no inspiration to try and survive.

Obama is the champion of mediocrity, inspiring true and lasting mediocrity in a mediocre generation of mediocre americans.

[DarkDragon]

Obamanomics

Huh. I could've sworn Henry Paulson was a member of the Bush cabinet.

[Beldaran]

Huh. I could've sworn Henry Paulson was a member of the Bush cabinet.

Yes, exactly. Bush the left wing spender, government grower, just like Obama.

Have you seen Obama's budget? Obamanomics indeed.