New Dell executive paid compensation valued at US$33 million

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This article was published 02/06/2008 (6384 days ago), so information in it may no longer be current.

DALLAS – Michael Dell received compensation that the computer company he founded valued at just under US$2 million last year, when he returned as CEO, but the leader of Dell Inc.’s consumer business received more than $33 million.

According to an Associated Press analysis of a regulatory filing Monday, most of the compensation for Ronald Garriques, recruited from Motorola Inc., came in the form of stock grants and options that the company valued at $25.3 million on the date they were issued in February 2007.

The company said in the document known as a proxy, filed with the U.S. Securities and Exchange Commission, that it paid founder Dell a salary of $950,000 in the financial year that ended Feb. 1, unchanged from the year before, and spent just over $1 million on the CEO’s personal and home security.

Dell is the world’s second-largest computer maker, after Hewlett-Packard Co.

For the second straight year, Dell received neither a bonus nor any new stock or option awards. Outgoing chief financial officer Donald Carty didn’t either.

But Garriques, recruited in February 2007 after overseeing tremendous growth in Motorola’s cell phone unit, was awarded 900,000 restricted shares of stock, which vest over five years, that the company valued on issuance at $21.8 million, according to the filing. He received options for 500,000 shares the company valued at $3.5 million more.

Garriques also got a $659,615 salary, a $3.5-million bonus, a $524,394 incentive plan payment and a $3 million long-term cash award, Dell reported.

The Associated Press calculations of total compensation include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. They don’t include changes in the present value of pension benefits and can differ from the totals that companies report in the summary line of proxy statements.

Dell also announced that its annual stockholders meeting is set for July’ in Austin. Among the items on the agenda are approval of the company’s annual executive incentive bonus plan and a shareholder proposal by an AFL-CIO fund for an advisory vote on executive compensation.

In arguing for their proposal, officials of the labour group said executive compensation hasn’t always been structured to serve stockholders and noted that former CEO Kevin Rollins was paid more than $8.5 million for a year when the company determined it had to restate financial results going back four years.

Michael Dell, 43, who started the company in his college dorm room replaced Rollins when the company faced a falling stock price and an investigation into its accounting.

The company earned $2.95 billion in the fiscal year that ended in February, up from $2.58 billion the year before, and sales gained 6.5 per cent to $61.13 billion.

Last week, the company reported that strong notebook sales and cost-cutting helped it post profit and revenue in the first quarter above Wall Street expectations.

Dell shares lost 2.3 per cent of their value in calendar 2007, and already have lost another seven per cent this year. The shares fell 27 cents, or 1.2 per cent on Monday to close at $22.79.