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    Highlights—March 17, 2007

  • Associated Press: IBM's Palmisano Paid $18.8M Last Year. By Brian Bergstein. Excerpts: IBM Corp. Chairman and CEO Samuel J. Palmisano collected compensation worth $18.8 million in 2006, a year in which the company posted record profits and enjoyed a rebound in the stock market.
    According to a regulatory filing Monday, Palmisano received $1.75 million in salary, plus $5 million in a bonus-like incentive payout.
    He was granted stock options with an estimated value of $3.3 million, plus stock equivalents -- valued now at $7.8 million -- that represent shares he can receive in 2009 if the company meets certain performance targets.
    In addition, he received $923,000 in perks and retirement benefits, such as $207,000 in company contributions to his 401(k) plan and $249,000 in dividend equivalents on restricted shares. That category also included $373,000 worth of personal travel on IBM airplanes and personal security services valued at $53,000.
  • Yahoo! message board post by "ffandrick". Full excerpt: That comes out to just under $50,000 a day, 365 days a year. People are criticizing Paul Mccartney's wife as being greedy because she wants $10,000 a day in the divorce settlement. Sam gets 5 times as much. I guess it makes sense, as she just screwed one Beetle (literally), while Sam is screwing thousands of retirees and a goodly number of employees.
    You'd think if the company could afford such an obscene salary they could provide a COLA every few years to the people who built the company Sam is now running. Our government is running at an enormous deficit and they provide COLA's to social security people. IBM is making huge profits but can't spare anything. IBM uses the "competitive with what our competition does" excuse. Any of our competition paying their CEO $50,000 a day? Very sad.
  • Yahoo! message board post by "thekanck". Full excerpt: Gosh if you figure Sam gets 5 weeks vacation and 10 holidays this "only" works out to only $84,000 per WORKday .... Ok ... time for me to head into the office .... I'm sure motivated now ........... NOT........
  • The Register (United Kingdom): IBM chief puzzles over payslip. Does that say $18.8m or is it $24.46m? By Joe Fay. Excerpts: Puzzling over your pension statements and worried about chomping your way through this year’s tax return? Spare a thought for poor old Sam Palmisano, chairman and CEO at IBM. AP reports that Palmisano picked up “compensation” of $18.8m this year, according to latest filings at the SEC.
    AP said it arrived at the final figure by taking into account Palmisano’s salary ($1.75m) and incentive ($5m) and then adding in all those little extras – like stock equivalents, pension payments, and travel.
    This may or may not have been news for Sam himself, who presumably signs off on IBM’s accounts. According to IBM’s own figures, Palmisano’s payout came to $24.46m. Either way, he is well ahead of his fellow directors, who are all scraping along on a measly $6m odd per year
  • MSN Money: International Business Machines Corp.: Insider Trading. Excerpt: The following corporate insiders or major shareholders have recently filed transaction reports with the SEC. Click a name to see transaction details. To see a different set of transactions, select All Transactions, Most Recent Transactions, or Planned Sales from the list.
    Note: Click the "Name" "Num Shares" or "Price" column headers to re-sort the table.
    Date Name Transaction Num Shares Price Value (US)
    02/27/07 DORMANN JUERGEN Sold 4000 96.00 384,000
    02/16/07 ROMETTY VIRGINIA M Sold 26470 99.06 2,620,000
    02/09/07 KELLY JOHN E III Sold 11000 99.27 1,090,000
    02/08/07 BLACK CATHLEEN P Sold 8000 99.34 794,704
    02/01/07 ZEITLER WILLIAM M Sold 33600 99.08 3,330,000
    02/01/07 HORN PAUL M Sold 25000 98.34 2,460,000
    02/01/07 ROMETTY VIRGINIA M Sold 8253 98.88 816,015
    01/31/07 PALMISANO SAMUEL J Sold 64000 98.80 6,320,000
    01/31/07 HARRELD J BRUCE Sold 80000 99.05 7,920,000
    11/27/06 MOFFAT ROBERT W JR Sold 23355 92.90 2,170,000
    11/06/06 SHAUGHNESSY TIMOTHY S Sold 22349 91.97 2,060,000
    11/01/06 LOUGHRIDGE MARK Sold 7951 92.50 735,467
    11/01/06 PALMISANO SAMUEL J Sold 93228 91.82 8,560,000
    10/27/06 MACDONALD J RANDALL Sold 38920 91.36 3,560,000
    10/23/06 HORN PAUL M Sold 19000 91.45 1,740,000
    10/23/06 O'DONNELL DANIEL E Sold 9448 90.99 859,644
    10/20/06 KELLY JOHN E III Sold 10000 89.95 899,500
    10/20/06 IWATA JON C Sold 33228 90.43 3,000,000
    10/19/06 MILLS STEVEN A Sold 43046 90.27 3,890,000
  • Yahoo! message board post by "ibmaccountant". Full excerpt: The breadth of the number of insiders selling in the month of February and early March has dramatically increased as compared to the same timeframes in 2003-2006. HQ, corporate directors, sales, legal, treasury, services, product development, and so forth are all selling. Even deputies in the legal team who are not well known are selling.
    Something's up. Probably not good for investors. Even Ginny Rometty thinks her hair-do will outlast the value of IBM stock over one hundred!
    For those who invest in mutual funds, you can direct the fund to exclude IBM shares from your assets. Sometimes that might require a change in funds, but it's worth it when fund personnel call you asking why you specifically want IBM excluded. Trust me, the word gets back to the fund manager.
  • Yahoo! message board post by "blue_in_pok". Full excerpt: I think that a better example can be found at http://finance.yahoo.com/q/it?s=ibm You can see that the top execs all got stock at $0 in Feb 07 as well as Feb 06, etc. I'm guessing that this is their annual performance grant of restricted stocks. They then sell somewhere between 25-30% of that number to cover taxes (again a guess on my part). Check that list again. Sammy just exercised a few options at $0. We were just given our annual Bonus/BAP/Performance Bonus, whatever. My Senior VP, Bob Moffat got a 10% larger grant of stock this year over last year. I got a 40% lower Performance bonus. What a crock !
  • Bloomberg: SEC's Cox Turns Executive Pay Into Hieroglyphics. By Graef Crystal. Excerpts: It's really amazing how the Securities and Exchange Commission achieved the opposite of what it intended when setting out to make reported executive compensation easier to understand. Blame it on the agency's kowtowing to the business community and efforts to adopt rules that created disclosure discrepancies where none existed before.
    The bottom line is that companies now can get away with under-reporting executive pay, mostly by disclosing bonuses paid not under the "bonus" column normally provided in a company's proxy statement, but rather in a new column entitled "Non-Equity Incentive Plan Compensation." This occurred in 84 percent of the 43 proxy statements I examined, which covered every company with a current market value of $3 billion or more that filed its proxy statement under the new rules as of March 9.
  • Yahoo! message board post: "New Salary Scheme" by "ol_pops". Full excerpt: Announced this afternoon. Details on w3. Maybe they finally heard all the griping about bonuses (or not). I guess they will take it out of raises (whatever those are...)
  • Yahoo! message board post "New SWG Salary Scheme" by Steve Mills, Office of the Senior Vice President & Group Executive, Software. Posted by "suckarama". Full excerpt:
    Dear SWG Team,
    In transforming IBM into a globally integrated enterprise, we have driven significant change across our business; reshaping our product and service portfolio to meet client needs, dedicating resources to foster innovation, and delivering client solutions that are revolutionizing industries from space exploration to health care.
    During this time, employee compensation has become IBM's single biggest investment -- one that must track closely with IBM's revenue and profit growth. Our compensation investment must also be delivered in a way that explicitly shows our commitment to pay competitively and to reward our top performers for their contribution to IBM's success. To help make sure this happens, IBM will make some important changes to employee pay programs.
    Beginning this year, we will introduce three important types of compensation investment (details below):
    IBM will specifically target a portion of our salary investment toward new Market-Based Adjustments (MBAs) designed to ensure that employees are paid competitively. This reflects IBM's commitment to competitive pay – one that has been challenging to meet when market pay rates move quickly for high-demand skills. MBAs will be used to increase base salary for employees in eligible job roles and countries where pay is lagging the market. The same job families will not qualify for MBAs every year. When your job family does qualify, all employees in that family who have received a "2" rating or higher, and are paid below the market, will receive a Market- Based Adjustment.
    For 2007, reflecting our focus on incentives rather than base pay, those on sales and services incentive plans will not be eligible for Market-Based Adjustments in most countries.
    Once we have completed our market-based salary adjustments (see above section), we will use the remainder of our salary investment to reward top performers in all jobs and markets. These Top Contributor Rewards will recognize employees whose contributions for the year outpace those of their peers. As in the past, managers will make these determinations based on each employee's relative contribution to their team and business success.
    While those on sales and services incentive plans will not be eligible for Top Contributor Rewards in 2007, they may receive sales and services incentives for top contributors, which are also designed to direct IBM's pay investment toward those who deliver the best results.
    Finally, we are making a major change to our employee bonus program. Reflecting IBM's overall focus on profitable growth, IBM is introducing a new, worldwide Growth Driven Profit-sharing program, which effectively replaces the Performance Bonus program immediately. This new program is designed to return a portion of revenue and profit growth right back to the employees who help drive that growth. For starters, all eligible employees will participate in a single, worldwide "One IBM" profit-sharing pool, reinforcing our commitment to cross-enterprise collaboration and integration. We will no longer base results on separate unit-specific pools. Further, results will be driven by how well IBM grows revenue and profit, year-over-year, rather than the more complex measures we have been using in recent years.
    The company will set aside funds, based on growth results, so you'll be able to see how overall opportunity accumulates throughout the year. This focus on business growth is easy to understand and directly supports our company's most critical imperative – the need for sustained profitable growth, year in and year out.
    As with the current Performance Bonus program, Growth Driven Profit- sharing applies only to IBM employees who are not on sales or services incentive plans. The payment opportunity remains up to 12% of pay for employees in bands 1 - 9 or up to 24% for band 10, depending on business and individual performance. From a practical perspective, though, the new profit-sharing approach is designed to produce greater funding than in the past in those years when the company grows – and less in those years when we fail to do so. Managers will continue to determine these individual payments, within suggested guidelines, to reward those who make the strongest contribution. More complete information about this new program will be available in the plan document on w3 later this year.
    Implementation of these compensation changes will be in accordance with local law and process, including industrial relations information and/or consultation requirements, if any. The current cycle for the 2006 Performance Bonus, which is paying out now based on 2006 business results, is not affected by these changes.
    IBM is committed to investing in competitive pay that reflects business performance and individual contribution. We are doing many things enterprise-wide to foster growth. These compensation changes support that growth agenda for you and for all SWG and IBM employees. Thank you in advance for your support and for your commitment to IBM.
  • Yahoo! message board post by "sby_willie". Full excerpt: The pay, performance, and bonus plan strategy in IBM sure is broke but is this now an honest and conscientious attempt by IBM to be willing to fix it? Or will it amount to more wordspeak and be short term retention "candy" to keep folks on until at least June 1,2007 so IBM can make their "90 day plan" for 2nd QTR 2007?
    Could the "candy" be an all day sour sucker or a jawbreaker? Or will it indeed be some lush chocolate to hang around for? I read the article last month about how IBM performance based pay needs to be overhauled in the latest Alliance@CWA Think Twice and now maybe it will come true. Ya think IBM might have read it previously also and took heed?! Time will tell.
  • Yahoo! message board post "Re: New SWG Salary Scheme" by "hymeramen". Full excerpt: Yes, our department was given this information at our team meeting. And the next topic was that 2 more employees were being let go as part of the LEAN initiative, and that more would be let go by the 4th quarter of 2007 due to Global Resource actions. There won't be anyone left in the US to worry about salaries!
  • Yahoo! message board post by Janet Krueger. Full excerpt: Active employees have access to a different set of options in NetBenefits than those of us who are already collecting a pension. Active employees will not receive a final estimate of their share of the settlement, or be allowed to select how they wish to collect it, until after they leave IBM and select their pension distribution options.
    The rest of us will get a personalized letter from IBM within the next month with details on what our individual share of the settlement is and what our collection option(s) are. So if you're already collecting your IBM pension, you won't find a settlement estimate in NetBenefits; wait, just a little longer, for your letter!
  • Yahoo! message board post by "by "blue.konix". Full excerpt: Very true portrait of IBM. I have come to be aware of so many cases like these and now am facing one where the company doesn't care about it employee.
    I am an employee of IBM India (I know many feel bad about us) but I am one of few people who joined IBM in India as long ago as 1998 when it was small (around 3000 employee) and was just serving the local market. I worked for ITS for 2 year and then moved to bigger roles. I was sent to US on short term assignment in 2002 but I returned to country after 7 months as I wanted to stay in India. They made me couple of offer to come back to US as part of outsourcing team in 2003-2004 which I refused. Then due to personnel reason I had to make a shift to US in 2005. When I discussed to my boss (executive team IBM) as I was directly reporting to him, about my resigning, he found me a job again with the outsourcing team who had some requirement in US. I was told that I would be PM in US. I took the assignment thinking that I will switch later once I am in US (as my husband is settled here).
    I came here and was asked to work in a lower job role (as Engineer) although I had previous experience as PM and Program Manager. I made up my mind to quite IBM India but was persuaded by my manager in India to continue. He even got me a work from home job. As there were some uncertainty personally (my husband is completing his PhD and financially the situation is tight) I continued.
    Now 3 months back I told my manager that I am pregnant to inform him of upcoming maternity leave which I would have to avail. Then started the odyssey.
    First the outsourcing team management came back to me and told that now i should return to India. They said that my project was ending prematurely and they don't want me in team due to my performance (this was never brought up earlier even in mid-PBC or initial PBC discussion of 2006). I was told that the team has lost confidence in me and hence can't give me another project in team. After some arguing they said they will find me job in another team but kept repeating unknown feedback issue (all this when they knew I was 5 month pregnant and all the stress could impact my unborn baby). I was told that if they don't find a project for me in 15 days (Dec 15-Dec 29 which all know is easy period in US due to holiday's), I should either return or go on leave of absence (without pay for 6 months).
    I approached HR on issue as I felt very helpless and some of the mails they generated to show as feedback where untrue and manipulative. HR said they will do some investigation. After 1 month HR came and said that there is no negative feedback but there really is no project and I will still have to proceed on backdated leave of absence.
    All this while I know they are getting other people from IBM India onsite for other projects.
    This is all we get for hard work we put in. I was recruited as campus grad in IBM and worked like dogs for IBM for 8+ years. In India I remember there were times when on Saturdays i used to leave office at 8:00 pm at night and the building guards used to tell me that i was working too much.
    So i guess it is immaterial where we work...IBM management is really screwed up.
  • Baltimore Sun: Most boomers can't count on inheritance. Deciding when to retire can bring troubling financial surprises to light. By Linell Smith. Excerpts: Baby boomers like to imagine their glowing prospects: Revolutionary solutions to aging, second and third careers, cruises, limitless possibilities. This generation of 78 million contains an abundance of beautiful dreams - and wishful thinking. Among the fantasies is the Great Boomer Inheritance. Almost as beloved as tales of boomers' disposable incomes are the theories about how they will spend the vast wealth they stand to inherit - $41 trillion, by some media accounts - to feather their post-retirement years. [...]
    "Our concern is that the baby boomers are going to be increasingly at risk in retirement. Life gets a lot tougher and I think the notion that inheritance is going to bail them out is not correct," says economist Alicia Munnell, head of the Center for Retirement Research at Boston College. "Wealth in the economy is extremely skewed: A fraction of the top one percent of the population has all the wealth. Bequests are even more skewed." And if there is an inheritance, she says, it may be divided among many heirs; boomers are a generation of siblings.
    "What people expect the typical boomer to inherit is $20,000," she says. "That's not a life-changing number. And because it's the middle number, half will inherit less than that. Most wealth is held by the very, very rich. Even if you have wealth at 65, you will probably use up a lot of it over the course of your retirement and your final estate will not be that big." [...]
    "A larger percentage of folks are saying, 'I'm just going to have to work for a long time," she says. "For the past 10 to 15 years, people have said 'I'm going to work until I'm 65.' Yet the average retirement age is 62. Maybe the boomers will actually stay in the work force longer, which would help their retirement enormously, or maybe they'll get caught by the same forces: You hit your 60s, you get a little bit tired, some new manager makes a ruling you find repugnant, and you say 'I'm out of here!'"
  • Forbes: Jobs For Grown-Ups. By Steven J. Greenberg. Excerpts: Without condoning ageism, we need to admit one uncomfortable truth: Older job seekers often make it too easy for companies to reject them. True, job seekers over 40 often face discrimination and may confront hurdles getting an interview that younger applicants do not. But before putting the spotlight on others, let's examine ourselves, the over-40 job seekers.
  • Wall Street Journal: Pension Tension: Figuring Out When to Lump It. By Theo Francis. Excerpts: More American workers are facing a critical question as they reach retirement: whether to take pension benefits as a single one-time cash payout, or as a lifetime stream of monthly payments.
    Companies are increasingly giving retiring employees that choice, and pension consultants say that most retirees take the lump sum when they can. For many, however, a lump sum may not be the wisest choice. People may spend down the money or invest it poorly. And depending on their life expectancy, they may well reap a greater benefit by opting for lifetime monthly payments.
  • Palm Beach Post: Brewin' benefits. Aiming to cut turnover and attract higher-quality employees, Starbucks is one of few retailers offering health benefits to part-timers. Excerpt: Behind the counter at Starbucks, Dennis Spars pauses from pouring a House Blend decaf grande to answer why he works for the coffee giant. "For the health benefits," replies Spars, 60, a retired insurance agent who moved here after selling his business in Wisconsin. "They're terrific."
    Before joining one of the three Starbucks inside The Gardens Mall, Spars was paying $550 a month for health insurance for himself and his wife. Under the company's health plan, he pays about $100 a month. Starbucks is one of the few national retailers — and one of a minority of employers of all types –– that provide health benefits to part-time workers like Spars. The Seattle-based company is so committed to providing the benefit that it raised the cup of coffee by about a dime two years ago to keep up with rising health costs and went public with it. Consumers responded by buying more Starbucks.
  • CNN/Money: Be flexible once you quit. You don't have to make a clean break from the working world - working part time can ease the transition. By Walter Updegrave. Excerpts: Making your money last through decades of retirement requires, first of all, a mental adjustment. You must make the transition from career mode, where the prospect of future raises allows a somewhat free spending lifestyle, to retirement mode, which requires more caution.
    Pam Reynolds, 58, who retired from IBM after a 30-year career, is grappling with that adjustment now. When she left Big Blue five years ago, Reynolds was making $200,000. Today, she's living mostly off her $54,000-a-year pension.
    "Before I didn't have to stop and think about what I was going to buy," she says. "That's been the biggest change in retirement - trying to trim my spending." One solution: Make a virtue of free time."The jobs I used to 'outsource' when I was working - gardening, housework, washing the car - I now do myself," she says.
  • Wall Street Journal: H-P's Pension Switch Signals End to Era Of Cozy Retirements. By Lee Gomes. Excerpts: Art Dill, president of the IBM Retirement Club in San Jose, remembers well when he left his company in the early 1990s. He received, in addition to the traditional gold watch, a $1,000 bonus and a company-sponsored dinner for him and 10 of his friends at the restaurant of his choice. For IBM retirees these days, says Mr. Dill, things are more perfunctory: a modest ceremony in which co-workers gather around the departing employee in some corner of the office to pay tribute.
    Ceremonies aren't the only thing that is changing about retirement. The old-guard tech companies, the last bastions of traditional pensions, finally have joined their younger counterparts in the New Economy. Pensions that guarantee a set payout upon retirement are no more. In their place are 401(k)s, in which retirement benefits depend on how much individuals chose to set aside, along with how well their investments did.
    One of the last holdouts from the old school was Hewlett-Packard, the 68-year-old Silicon Valley company long considered one of the most benevolent of U.S. employers. Late last month, the company announced it would be phasing out its pension plan for new employees and replacing it with a 401(k). [...]
    At IBM, a group gets together every month to keep up with all the technology the company has produced. A recent session, for example, involved the ins and outs of burning DVDs. There are trips abroad, regular social events and end-of-year dinners. Many of today's retirees wonder whether their children or grandchildren will do as well as they did after their careers end. "Before, someone could retire and be reasonably comfortable," says Mr. Dill. "I am not sure you can do that anymore."
  • InformationWeek: IBM Looks Beyond India to Vietnam and China. Excerpts: Faced with rising salaries and a talent squeeze in India, IBM is searching out new frontiers in its campaign to deliver tech services from countries that are geographically closer to many of its international customers and where skilled workers earn significantly less than their U.S. counterparts. With that in mind, IBM on Monday announced plans to open new computer services centers in Vietnam and China.
    The Vietnamese facility, IBM’s first in that country, will be located at the National University in Ho Chi Minh City and offer a range of services to customers in French-speaking areas such as France, Belgium, and parts of Africa.
    IBM’s new Chinese center will be located in the high-tech zone of Chengdu and will support customers in the U.S., Europe, Australia, and Japan. It will be IBM’s fourth application maintenance and development facility in China. [...]
    IBM is looking at expanding its offshore presence beyond India in part because the rapid influx of Western IT companies into the country — IBM itself now has more than 50,000 Indian employees — has created wage inflation and a shortage of managerial talent.
    India produces 400,000 technically trained graduates a year, but many are deficient in teamwork and language skills, according to a study released last year by consultants at McKinsey & Co. To boot, the Western hiring binge is leading to salary inflation of about 15% per year, according to Indian IT executives.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Physicians for a National Health Program: The Health Care Monster Returns: Even Republicans acknowledge its ravages, but what's the best way to slay the beast? By David Moberg. Excerpts: Like the creature from the Black Lagoon, the health insurance monster has returned, creeping back onto the public stage. After President Clinton’s jury-rigged pen to contain the monster collapsed in 1994, it never really went away. Political leaders tried to ignore the beast or deal piecemeal with its ravages, but it pushed more unsuspecting civilians into the uninsured pit, devoured more family budgets, squeezed even giant corporations’ ability to compete globally, and raised fear and insecurity among the populace.
    Now its depredations have become too loathsome to ignore for even cautious politicians and business executives — who still are inclined to see the monster as one of their own. After a rebuff in the fall elections, when voters ranked health care as one of their top concerns, President Bush offered a plan that almost certainly would not deliver his promise of “quality, affordable health care for all Americans.”
  • USA Today: Who's uninsured in 2007? It's more than just the poor. By Julie Appleby. Excerpts: Susan Squire lost her health benefits in 2000 when her company downsized and she was laid off. A few years later, she had a heart attack — leaving her with a $92,000 hospital bill.
    Dianne Stewart, who once had a six-figure income and health insurance benefits as an advertising saleswoman, now relies on the generosity of a group of doctors in her town near Charlotte for low-cost medical care.
    Joe Cesa, owner of a Philadelphia coffee shop, put a $3,000 emergency room bill on his credit card when he accidentally cut off the tip of his thumb. He can't afford insurance for himself or his employees.
    While each of their backgrounds is different, all have one thing in common: Through choices, circumstance, bad luck — or a combination of all — they are among the more than 46 million people in the USA, nearly 16% of the population, who lack health insurance.

New on the Alliance@IBM Site:

  • From the Job Cuts Status & Comments page
    • Comment 03/09/07: We just had 2 contractors leave. It was great. They both, a couple weeks apart, told the manager they had a family emergency and had to take a couple weeks off. Of course they were trying out their new jobs. They then called a couple weeks later and simply said they were not coming back. The manager was peed and said, no more family emergencies unless you can prove it. Like what in the hell do they expect? They deserve this kind of treatment and I don't blame these people for looking out for themselves. -ibmsuks-
    • Comment 03/11/07: to ibmsuks - your manager is potentially violating US Labor law since IBM managers who have contractors/vendors do work for them are not to "manage" that personnel directly. There is a strict separation since this can get IBM into serious legal trouble with the DOL and the contractors. If they aren't IBM employees, IBM can't directly manage them. -Anonymous-
    • Comment 03/15/07: IBM SWG is moving Voice products out of Boca Raton to China. An undisclosed number of employees are affected and have not been told they have jobs. No packages offered. -bocaSWGbust-
    • Comment 03/15/07: Two managers from my account site were recently sent to Brazil to scope out the new data center functions. We all realize it's only a matter of time before the customer commits to letting the work go offshore in the name of cheap labor. But I have seen the total degradation of the customers systems as IBM has done nothing to improve them. When the systems no longer function we will all be long gone. -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 03/11/07: Expanding on my earlier comments. 71% of IBMer's have fewer than 10 years of service, 45% fewer than 5 years. These are young, mobile, unattached workers. They have no experience of employer loyalty, and don't expect to give or get loyalty. They like the portable 401K retirement system since they don't expect to stay very long with one company. They are early career and much more focused on technical achievements and job promotions than on security.
      How do we talk to these employees? What do we offer them to entice them to consider our union? Most of us commenting here, and I suspect most of the membership, are in the remaining 29% of employees with 10 or more years of service. Management doesn't have to worry about us too much. Many of us will be gone in the next 5 years (fired or retired). There are not enough of us left to have any leverage.
      The entire union movement in America suffers from this problem, its why union membership has collapsed over the past 50 years. Unions never learned how to talk to white collar/educated workers, their message is aimed at traditional rust belt manufacturing. Heck, they still bring giant inflatable rats to strikes and yell "scab" at picket lines. No one under the age of 50 knows what a scab is, that word went out of use around 1960.
      Lets face it, IBM has cut pay, jobs, benefits, security, imported workers, treated us like dirt, and laughed in our faces for more than a decade now and only a few hundred people out of a work force of more than 100,000 have joined us. We are not reaching our fellow employees and we need a crash effort to figure out how to do that. Otherwise this will just turn into a bunch of cranky old guys complaining that things were better in the good old days (and that's how the young/new employees see us now). -Ironman-
    • Comment 03/13/07: Something stinks to high heaven... Time for employee bonuses and we're shown score cards that no unit across all of IBM met it's goals, then bonus pool cut to 75% of original size, and then measly bonuses handed out to the rank and file. Skip ahead 2 weeks and CNN reports that in IBM's proxy "2006 was Palmisano's best year at IBM" and he's awarded a bonus of 5.3 Million (a little less than 303% bonus, no that's not missing a decimal!) and that doesn't include all the stock awards and other compensation, that's just the cash performance bonus! Is this sort of disconnect in results reporting internal vs external actionable by the SEC? -Putting the Pieces Together-
    • Comment 03/14/07: Dear 5 year'er. You make some good points. Maybe we old timers whine too much, badmouth the company and call our CEO bad names. It doesn't look nice. You are missing the point though. It’s not about IBM. It’s about the middle class that is under attack, our way of life that is being dismantled, our country that is being sold out and our families that lost financial security and had to settle with a much worse life than they are used to. You may be a good employee, but sooner or later you will also be replaced, not because you do a bad job, just because someone else can do it so much cheaper. You will then look for another job and will have a hard time to find one because all the companies out there do the same thing and the competition for whatever is left will heat up. A few years down the road you may find yourself to be a middle aged former IT Professional. The only way to stop this madness is to stand up. -Oldtimer-
    • Comment 03/15/07: What more can you do to help IBM through these 'competitive' times? Did you give up enough of your family time? Do you place your health on the back burner? Did you just stay in your comfort zone? Did you miss enough school events and dinners with your SO to impress management? Do you not 'understand' the IBM values? Did you not check your emails while you were on vacation? Did you keep your skills up to date? Are you able to provide PBC goals / achievements that surpass your co-workers? If you were able to answer 'YES' to the above questions - Congratulations- You have just been made redundant by IBM. Now please, go away and reflect how your moral compass became so bent. But wait one second - Would you like to come back as a contractor? How much apathy can US workers have? Here's a nice article to read before your pager goes off... http://www.commondreams.org/views04/0820-09.htm -Big_Blue_Compass-
    • Comment 03/15/07: Someone help he understand the big picture. IBM is cutting costs by laying off IBMers in the US and hiring cheap labor overseas in India and China and now Vietnam. Meanwhile, Sam Palmisano is raking in the dough making the salary of 313 employees and then some. The IBM company is going to HELL in a hand basket. We have a RIGHT and an OBLIGATION stand up for what is right to put a STOP to this obscene behavior of this ruthless and inconsiderate CEO. Sam Palmisano is RAPING the IBM company and we are standing around watching and too stupid to put an end to this nonsense. Let's organize and join the Alliance and put an end to this immoral behavior by Sam Palmisano. The so called "man" doesn't give two shits about you and your job in the US. Let's show him what we think about him. Sam Palmisano is helping to ruin this country. -Joe Alliance-
    • Comment 03/15/07: IBM is easily the worst company in the USA. They have arrogant, non caring and unethical management from the top down. Any company that signs up with them will definitely deserve what they get. -Anonymous-
    • Comment 03/16/07: Now iBM wants to dump iBm employees in India because of their high pay and hire workers in Vietnam because of their lower pay! As predicted. If iBm could use slaves they would.. I wonder if workers in India will be so willing to train their Vietnam replacements! I doubt they will and now iBm will start to pay the price for betraying emplyees, around the world. -IBMontheCHEAP-
  • Pension Comments page
    • Comment 03/09/07: I am retiring soon and I have been in contact with my Retirement Benefits Coordinator. I sent in a question about the Cooper settlement today. The Cooper pension settlement is already in place in Netbenefits now. Estimate a benefit, check out View how this benefit was calculated, and go to page 4 and 7. Page 4 will show you how much you are getting and Page 7 will show how it was calculated. It is not very much, but better than nothing. -Anonymous- -
    • Comment 03/10/07: "I'm an old planner. All I see when I review the 'new plan' after Jan 2008 is that I lose on my retirement by about $750 per month." I am a retired IBMer and surprised you lose this much. While I am not making a whole lot on my pension check from IBM, around $10K per year for life, it does supplement my income. I had to get another job to pay the bills since I cannot afford to live on $10K per year. Do all IBMers on the old plan lose like this? I thought only the employees on the new plan took the hit. -Retired IBMer-
    • Comment 03/10/07: I called HR yesterday.....still no \'new\' estimator tool available.... maybe by YE they told me. So, now I can go to my Money Works class without knowing my actual cash balance amount or my annuity for 1-1-08 and beyond! -Anonymous-
    • Comment 03/11/07: Writing cautiously here, to avoid stepping on any toes. IBM sponsored a financial consultation with American Express Financial Advisors (or Ameriprise). Since it was no cost to me, and one of my friends reported good results, I went. As I was impressed with the half hour free session, I entered into a contract for financial advice. Over several meetings, I got two distasteful impressions (1) it appeared that the material given to me was boilerplate, that is, not really configured to my situation (2) it appeared that they were mostly interested in selling their own financial products rather than taking an agnostic view. After the initial contract I declined to renew. Now, I have received a letter from “AEFA Securities Litigation Settlement” saying that a class action lawsuit was in progress and that I might be a member of the class. Indeed, their allegations are very similar to my impressions as briefly described above. I present this information as a heads-up for others who might be members of the class. -Growing the 401k-
    • Comment 03/11/07: I didn't realize IBM was going to hook us up with Ameriprise. Some interesting comments here: http://tinyurl.com/yqzoh2 Today, Ameriprise does not have a very good reputation in the financial advice community. Just google the name and you will see. -Anonymous-
    • Comment 03/12/07: Sorry to see that IBM is still hooking up employees with Ameriprise - Am Exp. Fin. Adv. We opened accounts with them some years ago thru an IBM benefit of one kind or another . After a few years and some financial/investment self-education it became obvious to me that Ameriprise/AEFA had sold us their own brand of poor performing high expense front-loaded mutual funds that were neither age nor situation appropriate. Closed those accounts and have done much better managing it myself. -Retired IBM'r-
    • Comment 03/13/07: I see that iBM took care of Sam P's pension in 2006! Think will get a similar consideration and a smaller scale. iBM set aside $35 million for Sam's pension, which will be distributed over 5 years.. Must be he does very well on his PBC's! We are all being jerked around with the, take care of your investments, from iBM execs, while they feather their nests, good job or not.. Like stealing candy from a baby for them. We all take it, amazing! -SamGetsHandouts-
    • Comment 03/13/07: See IBM has a good pension plan. This was filed with the SEC and is proof and says it all. I remember when our IBM pensions were described as"deferred compensation" when the lack of raises was the subject. Too bad the judges that ruled against us all, didn't grasp this point. Our pensions were promised deferred compensation. IBM had already disclosed that Palmisano stands to receive $1.8 million in salary and a $5 million incentive payout in 2007. Monday's filing with the Securities and Exchange Commission revealed that Palmisano, 55, also is sitting on deferred compensation that was valued at $35 million at the end of 2006. It is due to be paid through five annual installments after he retires. -IBMPensionDeferred$-
    • Comment 03/13/07: Seems odd, no new estimator tool yet and 1-1-08 approaching soon. Rumor is that if you have 30 yrs, you will have to retire in 2007 to get it. If you wait 'till 2008 , you get the lump sum. Hmmmm , what would keep IBM from cashing out everyone (retirees and current employees) in 2008 ??? -Al Anon-
    • Comment 03/15/07: Hmmmm , what would keep IBM from cashing out everyone (retirees and current employees) in 2008 ??? The simple answer: Money. Pensions are deferred payments and somebody is making good use of that money until they have to pay it out, and hoping most retirees won't live long enough to use it all and leave enough in the fund. In any case, they're making more than they're paying out. They have to just to cover expenses and some profit is worked in there too. A buyout is bad for you and bad for them. They'll assume a best case interest rate to give you the least amount for a payment and that's that much less that they can use for hedge funds and bigger earning investments that only the big players can get in on. One of the reasons the lump sum is such a bad deal compared to the annuity is they don't want you to take it. -Anonymous-
  • Raise and Salary Comments
    • Comment 03/09/07: Salary = 103000; Band Level = 9; Job Title = IT Arch; Message = ironman and others, pls do not be discouraged from posting due to idiots like wow -hopefullyshortimer-
    • Comment 03/10/07: Salary = 8470; Band Level = 6; Job Title = System Engineer; Years Service = 0; Hours/Week = 40; Location = India; Message = Found on an Indian forum, a guy looking for advice on which job to take IBM at 3.75 Lakh or CSC for 4.92 Lakh. A Lakh is 100,000. 375,000 Rupees is $8,470.78. I'm guessing it's not per month. -Anonymous-
    • Comment 03/10/07: Salary = $80k; Band Level = 7; Job Title = IT Specialist; Years Service = 6; Hours/Week = "40" (actually much less); Div Name = Sales & Distribution; Location = Atlanta; Message = A 2 this year and got bonus of over $7000. Glad I left development when the cuts came down last year. -AtlantaIBMer-
    • Comment 03/14/07: Salary = greater than 48K/yr; Band Level = 03; Job Title = I/T Specialist; Years Service = 17; Hours/Week = supposedly 40/wk; Div Name = Integrated Technology Delivery, End User Support; Location = Southbury, CT, U.S.; Message = Where does an IBM'er find information on pay ranges for various band levels within IBM? Does anyone have some expertise on where to go to find this information? I'm contemplating an 'opportunity' and am wondering if the stress level's worth it for the pay. Thanks. -Anonymous-
    • Comment 03/15/07: Salary = 102k; Band Level = 8; Job Title = Advisory Engineer; Years Service = 12; Hours/Week = 40 - 50; Div Name = STG; Location = Austin; Message = Just saw the new salary plan and it looks like IBM found a new way to screw the employees. -Anonymous-
    • Comment 03/16/07: Salary = 78,500; Band Level = 6; Job Title = SW Engineer; Years Service = 1; Hours/Week = 55; Location = East Coast; Message = Manager gave me a 2 mostly because I hadn't been around a full year at the time of appraisal. 2.3% performance bonus. I consider myself lucky, but don't see a pay rise in my future any time soon. -Anonymous-
    • Comment 03/16/07: Salary = 67K; Band Level = 7; Job Title = Sr. Tech Specialist; Years Service = 1; Hours/Week = 45; Div Name = STG; Location = Atlanta; Message = 15 Yrs experience before joining -Anonymous-
  • PBC Comments
    • Comment 03/09/07: Prior Yr PBC = 2+; This Yr PBC = 2; This Yr Bonus = 1750; Prior Yr Bonus = 6000; Message = Was promoted 7 to 8. Never anything below 2+ level of rating. Was told "almost a 1" last year and if I keep doing what I'm doing, then I'll make a 1 this year. Was told it was a "bad year" this year. Its very odd that our business units have no metrics anymore. -always looking-
    • Comment 03/09/07: To the person who had two 1's in a row and received a $4000 bonus each year - was it really worth it? That's $80 extra per week. Assuming you worked a basic 40-hour week - which I'm sure you didn't - that's an extra $2.00 per hour. Work 50 hour weeks and it's only $1.60 more per hour. That's a horrible ROI. You'd almost be better off financially working a regular week and getting a second job as a Wal-Mart greeter. -Anonymous-
    • Comment 03/09/07: Why do we every year have to come up with all kinds of creative poop to "distinguish ourselves" from our peers while promising to do this and that for IBM? And if we do not manage to live up to our good intentions because our workloads become so heavy, we are dunned? I want to know what IBM promises us in return? Not even a raise...just the honor of maybe keeping our jobs and thinking up more gobbly de good for the next year's PBC's. Forget doing anything relative to the On Demand Community or their ECCC boola boola that they are harping on us about...when it comes time to look at your PBC, they say "well that was just volunteer work; very nice of you but really doesn't count" (no matter what they tell you otherwise - been there). -Anonymous-
    • Comment 03/10/07: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = 4.4; Prior Yr Bonus = 4.4; Message = I'm told I am one of the people near our cap of 5% for Band 8 at 2+.-Anonymous-
    • Comment 03/12/07: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = $4k; Prior Yr Bonus = $4500; Message = Upon giving me my variable pay this year, my manager said they were given less money than previous years and it was true across the company....tough year 2006 was. I find it hard to believe that Sam got $19M, including bonus last year...plus I read that 2006 was 'Palmisano's best year at IBM, as the company made $9.5 billion in net income, and shares of the tech giant rose 18 percent.' I find this hard to believe the why the employees are getting less than last year. Beyond that, Sam had the gall to write the following in the annual report when the employees get screwed again......"I am happy to report to you on a very strong year for our company. In my [Annual Report] letter last year, I said that we believed we had positioned ourselves to capture the most attractive growth and profit opportunities in our industry. In 2006, we did just that, setting new records in profit, earnings per share and cash performance." Samuel Palmisano, IBM Chairman and Chief Executive Officer...............what a disgrace, all a fraud. Time to leave this company that thinks so little of its employees. -Screwed again by IBM-
    • Comment 03/12/07: This Yr PBC = 2+ This Yr Bonus = 4% Message = my first bonus with IBM - am sure it will be less next year.. -Anonymous-
    • Comment 03/14/07: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = 3.99%; Prior Yr Bonus = 5.3%; Message = According to Sam we had a record profit, earnings per share, and cash were delivered in 2006. Gee, so that always add up to less bonus pay! Call it IBM's version of fuzzy math. -Anonymous-
    • Comment 03/15/07: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = 3000; Prior Yr Bonus = 3800; Message = Manager never called, never left e-mail, etc. I found out from the pay stub on 3/13/07... Respect for the individual? Sure. Thanks for your efforts employee. Sure. When will this all end? -Anonymous-

Vault Message Board Posts

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. A few sample posts follow:

  • "comparison" by "jaek99". Full excerpt: I have an offer from another consulting group. i was hoping to see what IBM offers entry level college grads in terms of salary, sign on bonus, relocation bonus, and average annual bonus - to compare to my offered package. any help would be greatly appreciated.
  • "Benchmakrs" by "Dose of Reality". Full excerpt: I will save you the trouble of reading the rest of this forum: Salary: Mid to upper 50s. Sign on Bonus: A trip to Palisades NY. Relocation Bonus: a Link to Mapquest.com. Average annual bonus: Target 8-12%. Sounds good, except it is never paid out no matter what your personal performance, since it is contingent on us making corporate profit targets that are always set at unachievably high levels. Figure "Mode" is 0% with mean at around 2%.
  • "cautiously optimistic" (regarding IBM's newly announced compensation program) by "colokee". Full excerpt: If you read GR's letter and RM's original letter, the biggest GBS compensation gripes are addressed. To even acknowledge that these issues exist is a big step forward for IBM. There have been significant salary adjustments within certain segments of GBS. Two years ago C&SI found this out. Last year, members of the SAP practice were next in line. I am cautiously optimistic that IBM will not drop the ball this time.
  • "Credibility" by "Dose of Reality". Full excerpt: I think to say that compensation gripes are addressed is a bit of a stretch. What you can say is that they say they will be addressed. Of course they also have been saying for years that people are our most important asset, and IBM provides a terrific career opportunity. Why would you think that the follow-through on this will be any better than it has been in the past?! Consider the source. Do you think they didn't know they were screwing you for the past five years?! What has changed?
  • "New Bonus Structure" by "12HCP". Full excerpt: If IBM is serious about people retention and being viewed by its employees as the best place to work, then it's overall pay, benefits and career opportunities have to be the best...not just middle of the road or benchmark equivalent...IBM should strive to be "the" benchmark if they are serious about this issue...bringing people up to their market value does nothing for retention...all it does is drive the market median higher (since you are taking part of the low denominator out of the equation)which once again puts people below market value...why is that the bean counters can figure out how to save 8 cents on a box of paper clips and implement a complex cost heavy process to control it...but they can't figure out how to be a market "leader" in terms of compensation...insanity is doing the same things over and over; and then expecting different results...this place is insane!!!!!!
  • "Talk the talk, walk the walk" by "wonderaboutibm". Full excerpt: Hope does spring eternal. The most intriguing thing about the IBM announcements is that it proves once again that IBM knows how to talk the talk. They certainly do concede (implicitly) some of the criticisms that have been mainstay topics on this board. But (to pile the bromides on,) actions do speak louder than words. As Dose noted, we have a lot of recent history to overcome, if this is to be considered for real. The best that can be said is that the jury is still out, and the jury is still on the verge of convicting.
  • "Amen to that" by "Dose of reality". Full excerpt: Unfortunately, we are past the inflection point where we can't reverse course. The amount of financial resources that it would take to reverse the bad karma and ill will generated over the past 5 years is far beyond what this regime and the investment community could stomach in terms of short term profit hit.
    IBM had a golden opportunity right after the PwC acquisition to make a statement through its compensation policy to its employees that would have locked them in and rekindled the old PwC "excellence at all cost" mindset. Instead they listened to those McKinsey dolts that said in the 2001-2 market, staff would have "no place else to go", so they should cut compensation and benefits. Prevention always costs a hell of a lot less than the cure, and at this point, short of a frame-breaking change, we are terminal.
  • "In a grim way..." by "wonderaboutibm". Full excerpt: McKinsey was right. IBM could "send a message" to restive employees in the labor bear market. So IBm gained 5 cents then and is losing a dollar now. But the dollar lost now is beyond the original 5-year projections.
  • "read the fine print" by "near the exit". Full excerpt: so now there will be a one-time adjustment for marketplace salary closure.. I wonder what the 'global' aspects of our business could mean to this - if done once worldwide, we might just be uplifting all the low-cost-countries towards US salaries.. instead of adjusting ours to fairness.. also, the new performance raises will apply only to those at 2+ and 1 PBC levels.. so now 50% or more of people will get nothing new each year.. gotta love it....NOT
  • "Reality Check" by "Dose of reality". Full excerpt: Math proof: Let's use 65k as a benchmark. Gross Bonus - 2,800. Federal, State, Fica - -900. Net Bonus - 1900. Extra hours worked per week to secure a rating worthy of such a "generous" bonus - 8 (in reality probably more). After tax per hour earnings on incremental effort - $4.70. This just doesn't add up. Don't spend your time chasing recognition or bonuses here. Chase better opportunities elsewhere, and while you are here spend your time developing marketable skills, not chasing the utilization "dog track rabbit"
  • "Reply to IBM anti-PwC Venom" by "12HCP". Full excerpt: Do you really want to get more ex-PwCers to leave? It's simple. Just keep doing what you are doing as a company, keep fooling yourselves that IBM is the great company that it was in its heyday, don't do anything about the back-biting culture, keep drinking the blue kool-aid, ignore the bureaucracy and complex processes that prevent us from meeting customer expectations...and most importantly keep referring to people as ex-PwCers rather than IBMers. Armonk and Somers don't have a clue about what makes a company great and they will continue to make decisions based on their quarteritis affliction and constant reaction to the street.
    Right now the only customer that IBM cares about is the shareholder. And then we wonder why the stick is exactly where it was two years ago? How about being a little open minded and understanding that there are good apples and bad apples on both sides of the fence (legacy IBM and PwC). I speak to many long-term IBMers who yearn for the good old days yet they do nothing to fix the problems of today. In fact, do you know how many IBMers it takes to change a light bulb? Four. One to get on the ladder and change the bulb; and three to stand around and talk about how good the old bulb was.
  • "The bulb +1" by "jeeee4". Full excerpt: And one to fire the guy for buying the bulb outside of IBM's hardware purchasing regulations.
  • "Correction" by "Dose of Reality". Full excerpt: I agree with 90% of what you said except: "Right now the only customer that IBM cares about is the shareholder" Wrong, the only customer that IBM cares about is the leadership team. The shareholder is being screwed just like you are, albeit on a slower track.
  • "Sorry PQ, but wrong..." by "BCS_Blue". Full excerpt: Before the acquisition of PwCC, IBM Services was a joke. Few, if any clients / customers, considered IBM a serious player in the services business. They ranked far below competitors in terms of delivery capability, share of mind and share of wallet. PwCC gave IBM the credibility and presence in the marketplace to be what it is today.
    Now, most of the PwC crew has left and took all the intellectual capital, relationships and everything else that IBM had hoped to gain with them. They - like many others - grew tired of IBM's continued denigration of its consultants and treating them as mindless drones.
    Reality is that as long as IBM let those remaining do their job, and stays out of their way, then they can generate revenue, profit and signings for them. Put in stupid policies and restrictive red tape - and that capability walks out the door along with the revenue, profit and utilization that comes with it. Don't bite the hand that feeds you!

"The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt
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