Tuesday, April 26, 2005
IBM Chief to aid esprit de corps
Faces In The News
Palmisano Vows 'Aggressive Action' On IBM Woes
Greg Levine, 04.26.05, 4:32 PM ET
NEW YORK - Doers and doings in business, entertainment and technology:
"Execution" might be a double-edged sword at IBM (nyse: IBM - news - people ). The technology behemoth struggling with its own weight posted a shortfall in its first-quarter earnings. On Tuesday, Chief Executive Samuel J. Palmisano addressed that harsh reality, as he spoke to investors at the firm's annual meeting. The CEO vowed that his firm was "taking aggressive action" to scourge its problems. The shortfall had been attributed to hiccups in would-be deal-closings at the quarter's end. Palmisano said sheepishly that "we attribute most of that [failure to close] to our own execution," according to The Associated Press. He did not detail such actions as might be taken, but merely said that IBM was "restructuring parts of our operations to reduce bureaucracy and move more of our people and resources out to the field, closer to clients." The CEO did specify one action that ought to aid esprit de corps: The leader and some 50 other top IBM execs will defer their own compensation increases "until we get our business back on track," Palmisano pledged. But others should not expect this belt-tightening to restrict them--yet--as he said that other employees would get raises as planned. Also Tuesday, IBM said it would allocate an additional $5 billion toward share buybacks, and had upped its dividend to 20 cents per common share, from 18 cents.
IBM Chief Executive Samuel J. Palmisano told shareholders gathered at the annual meeting here that the company was "taking aggressive action" to remedy problems that led to a first-quarter earnings shortfall.
The Armonk, N.Y., technology company had trouble closing deals at the end of the quarter, and "we attribute most of that to our own execution," Palmisano said.
He didn't specify what actions might be taken, but said the company was "restructuring parts of our operations to reduce bureaucracy and move more of our people and resources out to the field, closer to clients."
Analysts expect International Business Machines Corp. to cut jobs, particularly in lagging regions of Western Europe. Palmisano did say that he and about 50 other top executives had agreed to defer their own compensation increases "until we get our business back on track."
He added that other employees would get raises as planned. IBM's earnings shortfall, announced earlier this month, sent the company's stock price reeling and led to broader concerns that corporate demand for information technology was sagging.
Also Tuesday, IBM said it would allocate an additional $5 billion toward share repurchases and had increased its dividend to 20 cents per common share, from 18 cents. The company gave no timetable for the buybacks.
Shareholders presented six proposals on issues ranging from executive compensation to off-shoring of jobs. All failed, though a proposal that executive bonuses be calculated without regard for the impact of pension income on bottom-line results garnered 38.1 percent of votes cast.
One proposal, to account for the expense the company incurs when it issues stock options to employees, was rendered moot by IBM's decision to do so in the first quarter and withdrawn.
IBM's 12 director nominees were also elected at the annual meeting.
IBM also said Tuesday it had acquired Healthlink Inc., a closely held Houston-based health-care consultancy. The companies didn't disclose the purchase price.
IBM shares rose $1.36, or 1.8 percent, to $75.98 in afternoon trading on the New York Stock Exchange.
Palmisano Vows 'Aggressive Action' On IBM Woes
Greg Levine, 04.26.05, 4:32 PM ET
NEW YORK - Doers and doings in business, entertainment and technology:
"Execution" might be a double-edged sword at IBM (nyse: IBM - news - people ). The technology behemoth struggling with its own weight posted a shortfall in its first-quarter earnings. On Tuesday, Chief Executive Samuel J. Palmisano addressed that harsh reality, as he spoke to investors at the firm's annual meeting. The CEO vowed that his firm was "taking aggressive action" to scourge its problems. The shortfall had been attributed to hiccups in would-be deal-closings at the quarter's end. Palmisano said sheepishly that "we attribute most of that [failure to close] to our own execution," according to The Associated Press. He did not detail such actions as might be taken, but merely said that IBM was "restructuring parts of our operations to reduce bureaucracy and move more of our people and resources out to the field, closer to clients." The CEO did specify one action that ought to aid esprit de corps: The leader and some 50 other top IBM execs will defer their own compensation increases "until we get our business back on track," Palmisano pledged. But others should not expect this belt-tightening to restrict them--yet--as he said that other employees would get raises as planned. Also Tuesday, IBM said it would allocate an additional $5 billion toward share buybacks, and had upped its dividend to 20 cents per common share, from 18 cents.
IBM Chief Executive Samuel J. Palmisano told shareholders gathered at the annual meeting here that the company was "taking aggressive action" to remedy problems that led to a first-quarter earnings shortfall.
The Armonk, N.Y., technology company had trouble closing deals at the end of the quarter, and "we attribute most of that to our own execution," Palmisano said.
He didn't specify what actions might be taken, but said the company was "restructuring parts of our operations to reduce bureaucracy and move more of our people and resources out to the field, closer to clients."
Analysts expect International Business Machines Corp. to cut jobs, particularly in lagging regions of Western Europe. Palmisano did say that he and about 50 other top executives had agreed to defer their own compensation increases "until we get our business back on track."
He added that other employees would get raises as planned. IBM's earnings shortfall, announced earlier this month, sent the company's stock price reeling and led to broader concerns that corporate demand for information technology was sagging.
Also Tuesday, IBM said it would allocate an additional $5 billion toward share repurchases and had increased its dividend to 20 cents per common share, from 18 cents. The company gave no timetable for the buybacks.
Shareholders presented six proposals on issues ranging from executive compensation to off-shoring of jobs. All failed, though a proposal that executive bonuses be calculated without regard for the impact of pension income on bottom-line results garnered 38.1 percent of votes cast.
One proposal, to account for the expense the company incurs when it issues stock options to employees, was rendered moot by IBM's decision to do so in the first quarter and withdrawn.
IBM's 12 director nominees were also elected at the annual meeting.
IBM also said Tuesday it had acquired Healthlink Inc., a closely held Houston-based health-care consultancy. The companies didn't disclose the purchase price.
IBM shares rose $1.36, or 1.8 percent, to $75.98 in afternoon trading on the New York Stock Exchange.
# posted by J.C. : 5:37 PM
