You have to laugh or you’d cry, although the widows and orphans that hold IBM Corp shares have every reason to weep – IBM has finally made clear exactly how much it is compensating Louis Gerstner for the ignominy that will befall him if he fails to turn the company around, and a more blatant leftover from the Gordon Gekko greed is good 1980s would be hard to find: the total includes an annual salary of $2m, an annual incentive target of at least $1.5m with a minimum 1993 award of at least $1.25m; a long-term performance incentive with a target opportunity of at least $500,000; a one time payment of $4.29m for the value of benefits forfeited as a result of resignation; $160,130 for reimbursement of taxes; a 10-year stock option for 500,000 IBM shares at $47.88; an annual pension at 60 of about $1.275m; a payment of the difference between the market price and and $8.125 for each of 3.2m shares of RJR Nabisco stock on which Mr Gerstner holds through employment at RJR Nabisco, amounting to something in the region of $2.24m as at February prices; $637,500 from the 300,000 RJR shares he held as collateral for a loan to buy them; and in the event of termination without cause or due to a change in control in IBM, a payment of 36 months salary plus pro rata incentive payments and other specific benefits.
