IBM investors staged 2021 revolt over exec pay

IBM moved to appease shareholders that last year revolted against executive compensation proposals when they contested the massive one-time equity award granted to former Red Hat boss Jim Whitehurst. Whitehurst, who was made IBM President following Big Blue's $34bn buy of Red Hat, was to be handed a compensation package of …

[VoiceOfTruth]

RedHat has never been cheap

And now you know why! Seriously, a few years ago when I looked into it properly, RedHat licences cost more than Solaris. I don't imagine that has changed.

The next time I hear some some gullible open source contributors, whose work goes into Linux, complaining that they don't get paid to do this, direct them to RedHat. These coders are allowing themselves to be exploited.

[badflorist]

Re: RedHat has never been cheap

Uhhhhhhhh... I mostly agree *IF* this was another article, but did you read this one?

Exec's being paid ridiculous amounts has been a trend for the last 30 years, are shareholders just noticing this? I'm not implying that millions in a bonus shouldn't be a thing, but you should have to do some serious beneficial work to receive such a thing. In this case, I think maybe the bonus should of been a negative value ("Thanks for coming on board, leave your wallet on the way out").

[Snake]

Double standards

""motivate, retain and align named executive officers with stockholders."

Ah. Note that executives gets bonuses for doing everything from increasing profits to laying off workers, yet never get a dime removed when their decisions suck and business tanks. At the most they walk away, with their severance packages in-hand to boot.

And we, the People, keep voting for this system, both in the ballot box and with our own wallets.

[badflorist]

Re: Double standards

I don't think _WE_ are, I think the stockholders are. Is there a difference? Maybe, maybe not, but at least some stockholders are becoming less comfortable with it.

You're right though. Would CompanyXYZ be less of a company if the exec's weren't paid ridiculous amounts? No, but the employees would be a lot better off (you know the ones that do 99% of everything besides going yachting).

[Potemkine!]

Re: Double standards

_WE_ are, because we vote for the people making the laws and adjusting the taxes making all this possible.

[Anonymous Coward]

Re: Double standards

As a general practice, I vote against any executive (or board member) stock or pay raise proposal in every shareholder vote I participate in.

Even if the big wheels are doing a passable or even good job, they're almost certainly overpaid.

I try to be careful not to vote against any employee stock plan proposals, and with a little scrutiny you can usually separate them.

Of course I have no illusions that my meager share votes tilt the scales to any great degree, but maybe if enough of us say "enough!" it will eventually make some difference. Hopefully this is a sign of the tide turning a bit.

[Anonymous Coward]

Re: Double standards

"At the most they walk away, with their severance packages in-hand to boot."

And the rest .....Don't forget the "consultancy" gig pay too ...as the previous incumbent I believe is still on.....

[AdamWill]

Re: Double standards

Well, this particular case tends to suggest that IBM believed Mr. Whitehurst is extremely competent. If you boil out all the weasel words it comes down to "we were paying him a gigantic sum of money to sign a non-compete". i.e., IBM was just *that* terrified of him going somewhere else and competing with them.

If IBM thought he was rubbish, they wouldn't be bothered about backing up the money truck to get him to sign a non-compete agreement...

[Anonymous Coward]

It's all about the yachts

The investors who objected didn't do so to champion pay equity.

Here, and in other corporations, investors want lower compensation so that profits increase.

Investors object to CEO's yacht money keeping them from buying bigger yachts.

[LovesTha]

Re: It's all about the yachts

At least greater corporate profits help most people in two ways: Through various methods we all own tiny bits of the big companies, and they might pay some tax on the profit.

[Tom 7]

If directors pay was actually related to performance

then GDP in most countries would be an order or three of magnitude higher than it is.

When will shareholders realise they're being robbed?