IBM's Rometty nets $16.2 million in first year as CEO

In her first year as IBM's CEO, Ginni Rometty earned a $16.2 million pay package. That's nearly double the compensation Rometty earned in the year before her appointment as Big Blue's chief executive, but less than half that paid to former CEO Sam Palmisano, who remained IBM chairman until October and netted $37.1 million in 2012.

Rometty's 2012 compensation package included a $1.5 million salary, $3.9 million bonus, stock awards worth $9.3 million, and $823,002 attributed to changes in the value of her pension and retention plans, according to documents filed this week with the U.S. Securities and Exchange Commission.

Rometty also received $687,725 in perks and other compensation. Her perks included: $304,376 for personal travel on company aircraft; $21,551 in tax reimbursements; $297,000 for company contributions to benefit plans; and an undisclosed amount for financial planning, personal use of company cars, personal security, annual executive physical, and family attendance at company-related events.

Ninety percent of Rometty's total 2012 compensation was performance-based (27% in annual incentive and 63% in long-term elements), and she earned 10% of her compensation in salary.

In its 2012 fiscal year, which ended Dec. 31, IBM revenue fell 2% to $104.5 billion from $106.9 billion in 2011. Net income grew to $16.6 billion, a gain of 5% compared to $15.9 billion in 2011.

In justifying Rometty's $3.9 million performance-based bonus, IBM's board of directors cited, among other accomplishments, her delivery of $15.25 operating earnings per share; shareholder dividend increase from $3.5 billion in 2011 to $3.8 billion in 2012; double-digit revenue growth for IBM's Smarter Planet strategy; expansion of IBM's cloud portfolio; and commercialization of the Watson platform.

Rometty's $16.2 million package dwarfs the $8.3 million she earned in 2011, when she was IBM's senior vice president and group executive for sales, marketing and strategy.

Palmisano handed the CEO reins to Rometty effective Jan. 1, 2012, and she assumed the role of chairman on Oct. 1 of last year. Rometty joined IBM in 1981 as a systems engineer and moved into a series of managerial roles, including running IBM's global business services division and helping to integrate the $3.5 billion acquisition of PricewaterhouseCoopers Consulting.

Palmisano -- who remained chairman until October and then served as a senior adviser to IBM until his retirement in early December -- received a 2012 package valued at $37.1 million.

Rometty's total pay is calculated using data supplied in a proxy statement filed with the SEC on March 11. The following figures are taken from the summary compensation table: salary, bonus, stock awards, non-equity incentive place compensation (performance-based cash bonus), change in retention plan value, change in pension value, and all other compensation. The estimated value of equity awards represents the grant date fair value for stock awards and stock options granted during the fiscal year.