IBM CEO Arvind Krishna’s pay jumps 23% to $25M— What’s driving the massive increase?

IBM CEO Arvind Krishna: IBM CEO Arvind Krishna’s total compensation increased by 23% in 2024, reaching $25 million, compared to $20.3 million in the previous year. His stock awards saw a major rise from $11.4 million to $14.8 million, while his base salary remained unchanged at $1.5 million.

IBM’s board also approved an annual incentive payment of $3,850,000 for his 2024 performance. The CEO’s pay ratio compared to the median employee’s salary was 518:1, with the median employee earning $48,582. IBM reported $62.8 billion in revenue for 2024, driven by AI and hybrid cloud innovations.

?IBM’s Performance and CEO’s Incentives

IBM’s board of directors approved an annual incentive payment of $3,850,000 for Krishna’s performance in 2024. This amount represented 110% of his target opportunity and matched the company’s incentive score. IBM highlighted its strong financial performance in 2024, with total revenue reaching $62.8 billion, fuelled by innovations in hybrid cloud and artificial intelligence (AI). The company also reported $13.4 billion in cash from operations and $12.7 billion in free cash flow.

Also, IBM achieved $3.5 billion in annual productivity run-rate savings from 2022.

CEO vs. Employee Pay Ratio: A Growing Gap?

The difference between the CEO’s pay and the median employee salary at IBM remains a major point of discussion. In 2024, the CEO-to-employee pay ratio stood at 518:1. While Arvind Krishna earned $25,143,682, the median employee's annual compensation was $48,582, with a base salary of $43,069.

This major gap has sparked discussions about executive pay vs. average employee earnings. This is generally a common issue in large corporations.

IBM’s Talent Retention and AI Innovations

Despite concerns over pay disparity, IBM maintained a lower attrition rate among top performers. It was 25% below the company’s overall voluntary departure rate. This suggests that IBM successfully retained important talent for expansion and innovation.

IBM also launched new AI and computing technologies in 2024, including the IBM Telum II microprocessor and the IBM Spyre Accelerator. These innovations will deliver high-performance, secure, and power-efficient enterprise and AI computing solutions.

Arvind Krishna’s pay increase highlights IBM’s financial growth and focus on AI-driven innovation. But the 518:1 pay gap between the CEO and the median employee continues to be a topic of debate.?

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