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Stock options for IBM chief

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CIOL Bureau
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Nicole Volpe

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NEW YORK: IBM chief Louis Gerstner took home a compensation package last year
that could be worth well over $100 million - including stock options he received
for the first time since 1997. International Business Machines Corp., which
emerged from 2000 relatively unscathed in the midst of a technology burnout,
called chairman and chief executive Gerstner's performance
"outstanding."

IBM's board awarded him options for 650,000 shares that could be valued at
more than $113.5 million if IBM stock were to appreciate 10 per cent over the
life of the options, which expire in 2010. That was in addition to a salary and
bonus that together totaled $10 million.

"In a year of unprecedented volatility and challenge in the marketplace,
Mr. Gerstner's performance and leadership in reaffirming IBM as the industry's
premier e-business company and in positioning IBM for continued growth was
outstanding," IBM said in its report to shareholders.

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Gerstner last received options in 1997 - for a whopping 4.4 million shares.
He didn't receive any for 1998 and 1999, the proxy showed. "They take into
account the entire compensation picture - salary and bonus," said IBM
spokesman Rob Wilson about some of the matters considered by the board in
determining whether to award stock options.

"They also do look at (what the executive was awarded in) previous years
as well," he added. Gerstner's salary was $2 million in 2000, unchanged
from 1999, and his bonus rose to $8 million from $7.2 million in the previous
year, according to the proxy statement filed with the Securities and Exchange
Commission.

All other forms of compensation, which includes some long-term rewards,
totaled $4 million. The 650,000 shares under options expire April 2010 and have
an exercise price of $109.62. In 2000, Gerstner exercised options on 703,156
shares worth about $60 million.

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Despite a general downturn in the technology market that has battered most
tech stock prices, IBM is still trading within the low end of last year's range.
Gerstner has gloated at the demise of the dot-coms, which he called the
"fireflies before the storm," which during the heady technology
explosion made IBM look ponderous.

IBM has so far said nothing to indicate it is feeling the effects of the
slowdown in spending on computers by either individual consumers or businesses.

(C) Reuters Limited 2001.

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