Palmisano paycheck fattens

NEW YORK: International Business Machines Corp. paid Chief Executive Officer, Samuel Palmisano $6.95 million in salary and bonus in 2003, up 17 percent from 2002, according to a federal filing.

Palmisano, who was named chairman at the start of 2003 after being promoted to chief executive officer in 2002, was paid a salary of $1.55 million and a bonus of $5.4 million.

He also received deferred compensation of $769,095 and other compensation of $181,500.

In 2003, the company's earnings more than doubled to $7.58 billion, or $4.32 per share from $3.58 billion, or $2.06 per share a year earlier. Revenue rose 10 percent $89.1 billion from $81.2 billion.

But the world's largest computer company said in a separate filing with the U.S. Securities and Exchange Commission that its 2003 net income would have been 15 percent lower if it had treated stock options as an expense under the fair value method.

Palmisano's 2003 salary and bonus are an increase from the previous year's $1.43 million salary and $4.5 million bonus. He received deferred compensation of $853,505 and $133,000 in other compensation in 2002.

The Armonk, New York-based company said in its shareholder proxy that Palmisano received options for 250,000 shares, down from 300,000 a year earlier.

Palmisano had $29 million of exercisable in-the-money options or stock appreciation rights at the end of 2003 and more than $3 million worth of unexercisable stock.

IBM faces eight shareholder proposals at its annual meeting on April 27, including several that focus on the company's compensation policies.

It also faces one proposal that it follows certain rules regarding doing business in China, another to expense stock options and one that it disclose political contributions.

IBM said that had it expensed stock-based employee compensation and used the fair value method for all such awards, it would have caused a hit of $1.10 billion, or 15 percent, toward its 2003 net income of $7.58 billion.

Also, IBM said that as of Dec. 31, 2003, the company and its wholly owned subsidiaries had 319,273 employees, up 1.1 percent from 2002.

© Reuters