My opinion and reaction to the journal:
“Gerstner’s Pay Package at IBM” by Paul Hodgson.
The journal gives us the detailed information of IBM’s chairman and CEO, Louis V.Gerstner Jr.’s payment package. Here, we can clearly see what exactly attracted Mr. Gerstner, who was at that time working as a CEO and chairman of the RJR Nabisco (he worked for 4 years), and made him take the job at IBM. The main reason of his decision, as we can see, was generous” payment package offered from IBM. Comparing to Nabisco, the IBM payment package and special payment were so big that, I think, nobody can refuse to that. IBM guarantee him sales price of $8.125 per share for Nabisco’s share, which originally was $5, and $7.50. At the end, according to the journal, Gerstner received $22,854,329 from employment in 1993. Also, IBM covers all the expenses, which could cost Gerstner, when he terminated the contract with Nabisco. Besides that, IBM granted Gerstner with 500,000 stock options in 1993, and opportunity to increase that to 10,301 stock units. And at the end, He managed to receive restricted stock unit award of over 125,000 shares on 2002, and before the stock price went down, his holding was worth $97,626,092. Beside those compensations mentioned above, we should not forget that he also has annual and long-term incentives, as well, profit-sharing, pension and any other insurance coverage of any other insurances, plus business expenses. And those compensations wasn’t cheap as well, for example, corporate aircraft and company vehicle expenses were more than $30,000 for one year (in 1999, corporate aircraft expense were $27, 354 and car usage $15,191; in 2000 $36,778 and $43,101 in 2001). So it seems like he was fully using his position and compensation.
From the article, it seems like Gerstner was a really smart guy, who just basically, saved IBM from the bankruptcy. Definitely, he was a great salesman who knew his customer and what customer wants. He increased the sales...