International Business Machines Corp brought back annual performance bonuses for its chief executive and her top lieutenants for 2014 despite falling profits and a tumbling stock price, a regulatory filing showed on Friday. The technology company, which has posted lower revenue for 11 quarters in a row as it struggles to transform itself into a cloud-based software and services company, withheld annual bonuses in 2013 at the executives' own request.
The bonuses returned as a feature of IBM's executive compensation for 2014, according to a document filed with securities regulators on Friday, despite the fact that IBM's net profit from continuing operations fell 7 percent last year and its stock shed about 14 percent. IBM CEO Virginia Rometty will get a $3.6 million annual incentive payout for 2014, according to the filing. Chief Financial Officer Martin Schroeter and three other executives or advisers were also listed as getting smaller annual incentive payouts. Rometty is slated to receive a base salary of $1.6 million for 2015, her first raise from the $1.5 million she got each of the last three years after taking up the post of CEO at the beginning of 2012.
Rometty is also slated to receive a target annual incentive award of $5 million for 2015 and a long-term stock grant worth $13.3 million, which would be payable in 2018, according to the filing. The company last year withdrew its long-term plan to hit $20 per share in operating earnings for 2015 as it faltered in its move away from hardware to focus on higher-margin businesses such as security software and cloud services. IBM has been divesting underperforming businesses in an attempt to move into the new era of cloud computing, a struggle shared by other established technology leaders. Earlier this week the company dismissed a report it was planning massive layoffs.
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