IBM CEO Krishna’s salary jumps 23% to $20 million

Bengaluru: IBM chairman and CEO Arvind Krishna’s compensation jumped 23% to $20 million in 2023 from $16.5 million in the year-ago period, the company’s 2024 proxy statement showed.
For the 2023 performance, the board approved an annual incentive payment of $3.5 million for Krishna, which was 117% of target. His base salary of $1.5 million was unchanged from the previous year and he earned stock awards of $11.4 million in 2023, the filing said.
“In making this award in line with the company’s incentive score, the committee also considered Mr.Krishna’s overall performance against his objectives, which included strong free cash flow generation, sustainable revenue generation (at constant currency), and the continued optimisation of the company’s portfolio, with an increased mix of higher growth software and consulting revenue. In addition, the committee considered Mr. Krishna’s personal leadership in AI and quantum computing, driving IBM’s high-performance culture, as well as continued best in class employee engagement,” the filing showed.
IBM revenue performance for 2023 was $61.9 billion and $13.9 billion cash from operations and the compensation committee factored in the following metrics for Krishna’s compensation assessment. IBM’s software revenue grew 5% year-to-year and its consulting revenue grew 6% year-to-year at constant currency. The company generated free cash flows of $11.2 billion, up $1.9 billion year over year. The firm closed 9 strategic acquisitions in 2023 and invested $7 billion in research, development, & engineering, focused on expanding hybrid cloud and AI capabilities.
IBM said it has rewarded Krishna for delivering AI capabilities across the IBM technology stack through its AI and data platform Watsonx. He was instrumental in creating an integrated governance programme creating a consolidated, company-wide view enhancing regulatory compliance and time to market. He is also rewarded for having grown expertise for key skills –AI, cloud, and security.
Krishna, in a letter to shareholders, said, “Watsonx is one example of how we are quickly transforming research into commercial applications. We also continued to enhance IBM Z and AI Ops solutions. And we unveiled our Quantum Heron processor, which improved the performance, efficiency, and scalability of the newly deployed IBM Quantum System Two. IBM also expanded our portfolio through strategic acquisitions, underscoring our commitment to invest in the success of our clients.”
The ratio of the CEO’s annual total compensation to that of the median employee’s annual total compensation is 312:1. This ratio is based on annual total compensation of $20.3 million for the CEO and $65,463 for the median employee. The base salary for the median employee was $45,197.