Yahoo Finance We Think Some Shareholders May Hesitate To Increase International Business Machines Corporation's (NYSE:IBM) CEO Compensation
Key Insights
International Business Machines to hold its Annual General Meeting on 30th of April
CEO Arvind Krishna's total compensation includes salary of US$1.50m
The total compensation is 37% higher than the average for the industry
Over the past three years, International Business Machines' EPS grew by 23% and over the past three years, the total shareholder return was 54%
Under the guidance of CEO Arvind Krishna, International Business Machines Corporation (NYSE:IBM) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 30th of April. However, some shareholders may still want to keep CEO compensation within reason.
See our latest analysis for International Business Machines
Comparing International Business Machines Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that International Business Machines Corporation has a market capitalization of US$167b, and reported total annual CEO compensation of US$20m for the year to December 2023. That's a notable increase of 23% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.
For comparison, other companies in the American IT industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$15m. Hence, we can conclude that Arvind Krishna is remunerated higher than the industry median. Moreover, Arvind Krishna also holds US$70m worth of International Business Machines stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.5m | US$1.5m | 7% |
Other | US$19m | US$15m | 93% |
Total Compensation | US$20m | US$17m | 100% |
Talking in terms of the industry, salary represented approximately 31% of total compensation out of all the companies we analyzed, while other remuneration made up 69% of the pie. It's interesting to note that International Business Machines allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at International Business Machines Corporation's Growth Numbers
International Business Machines Corporation has seen its earnings per share (EPS) increase by 23% a year over the past three years. Its revenue is up 2.2% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has International Business Machines Corporation Been A Good Investment?
Most shareholders would probably be pleased with International Business Machines Corporation for providing a total return of 54% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for International Business Machines that investors should be aware of in a dynamic business environment.
Switching gears from International Business Machines, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
