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6, 2000 April, 2000

Highlights—March 1, 2008

  • New York Times: I.B.M. Plans $15 Billion Share Buyback. Excerpts: I.B.M. said on Tuesday that its board had authorized a $15 billion share buyback program that could increase 2008 earnings by up to 5 cents a share, sending its stock up 4.2 percent. News of the planned repurchase, equivalent to about 10 percent of the market capitalization of I.B.M., pushed the stock market higher. The company’s shares rose $4.30, to $114.38.
  • Yahoo! IBM Pension and Retirement Issues message board: "IBMs $15 Billion stock buyback" by "ranheimchas". Full excerpt: It is almost difficult to believe that IBM has the cash reserves to spend another $15 Billion on stock buybacks while increasing the medical costs for retirees with no relief in sight. That is just another slap in the face for all of us who gave so many years of our life helping to make IBM the good company that it used to be. How things have changed. We were once included in the large pool of employees to help keep our medical costs down. Now, being in a much smaller high risk pool certainly drives our medical expenses out of reach for many retirees. As I have said before, I am not angry over how IBM treats us now, but I certainly am hurt to think that a company we all respected would treat us this way in our final years.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: COLA?" by "i_be_mad_as_heck". Full excerpt: I have to respectfully disagree that there is nothing retirees can do. If thousands of retirees show up at the Annual Shareholders Meeting and make their feelings known to management and the shareholders, I believe COLAS will get some attention. But I don't hold out much hope of a large number of retirees showing up at the ASM. In general, retirees are a pretty docile group and still have blind hope that the company will do the right thing.
  • Yahoo IBM Retiree Information Exchange message board: "Re: COLA?" by "ignatz713". Full excerpt: Un huh. You mean before or after the microphones go dead on those with the important, rather than planted, questions?
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBMs $15 Billion stock buyback" by "jonatha1". Full excerpt: If you look at IBM's balance sheet from its quarterly reports, you will often see stockholders' equity go down even though the company has reported positive net income. Given the complexity of IBM's operations, there are probably many ways this could happen. However, one of the simplest explanations is that they're spending more money than they make in order to buy back stock. At some point that will no longer be a viable strategy...
  • Yahoo! IBM Employee Issues message board: "$30 Billion dollars in IBM Stock Buybacks 2007 and 2008" by "ibmmike2006". Full excerpt: The business climate of the market in 2007 and presently has not been Up. So how has IBM found all this money to buy back $15 Billion in 2007 and another $15 Billion in 2008? I guess the credit of the IBM company is pretty good.

    But, maybe there is another reason. With the stock price up from the 70's last year to $114 today. The shareholders? The Executives? Institutions investing in IBM for IRA, 401K, 403B, 457 accounts? Well all the above.

    The Executives stand out as benefiting the most with Stock Options that are expiring June 30, 2008 awarded June 30, 1998. As they say, "Greed is good". So there might be a "sell off bubble" before June 30, 2008. You will not see the individual sell of Louis V Gerstner Jr of his 20,000,000 shares as he is no longer a VP or director. His strike price along with the other 34 Stock Option award receivers is about $53 so if the price, at the time of sale is $114 as of today, Gerstner will glean $61 a share times 20,000,000 or $1,220,000,000 in his bank account.

    After giving this chart to a reporter at the IBM stockholder meeting a few years ago, the information disappeared from the cbsmarketwatch.com website. You can probably find these stock option awards in the archive filings at the SEC however.

    In the following chart, I visited www.cbsmarketwatch.com and looked at each person listed that received stock Options on June 30,1998. The day Gerstner negotiated his outrageous contract and stock options. So these assumptions are made, we know that these folks sold shares, but lets assume, they did not, are good employees like me, and held their shares and are going to cash them in today. All of them. Now when they do, we will assume, that all the money is taken out of the company, at the present share price of $114, Feb 27, 2008.

    The Options, June 30, 1998 were issued with an exercise price of $106, there was a split in June 1999 of 2 for 1 share, the amount of stock would double and the exercise price would halve to $53 a share. But, did you know, that Gerstner had the power to change the exercise price from what the shareholders approved in 1998? The $53 stock option can be turned in, Lou mentions this on page 99 of his "Elephant" book as distasteful. You can see this as Lou bought a lot of shares at $13 and so did many of these "35 people" and turned around and sold the same $13 share the next day for $115.

    Stock Options Awarded June 30, 1998 to "35" People:

    Name Title Stock Options Awarded in 1998 Stock Options Following June, 1999 2 for 1 Split Value of Stock if Sold on Feb 27, 2008
    Abuzayyad, Ray VP 80,165 160,330 $18,277,620
    Akers, John VP 44,177 88,708 $10,112,712
    Armstrong, John VP 8,863 17,726 $1,952,364
    Attadaro, Michael VP 110,025 220,050 $25,085,700
    Beitzel, George (affiliated) VP 2,132 4,264 $486,096
    Burke, James VP 150,515 301,030 $34,317,420
    Cannavino, James VP 7,685 15,370 $1,752,180
    Conti, Carl VP 11,923 23,846 $2,677,404
    Donofrio, Nicholas Officer 92,755 185,510 $21,148,140
    Evangelista, Donald VP 17,094 34,188 $3,897,432
    Forese, James VP 16,966 33,932 $3,868,248
    Gerstner, Louis V COB 10,713,960 21,427,920 $2,442,782,800
    Hancok, Ellen VP 8,586. 17,172 $1,957,608
    Kalis, David Officer 320,000 640,000 $72,960,000
    Katzenbach, Nick Director 50,733 101,466 $11,567,124
    Kavetas, Harry VP 60,049 120,098 $13,691,172
    Kuehler, Jack President 34,612 69,224 $7,891,536
    LaBant, Robert VP 3,706 7,412 $844,968
    Lautenbach, Ned VP 8,249 16,498 $1,880,772
    Libero, Robel VP 112,562 225,124 $2,864,136
    Low, Paul VP 32,431 64,862 $7,394,268
    Metz, Frank Officer, Director 14,753 29,506 $3,363,684
    Michael, Armstrong VP 17,494 34,988 $3,988,632
    Opel, John Director 120,920 241,840 $27,569,760
    Pucket, M VP 9,859 19,718 $2,247,852
    Ricciardi, Lawrence Officer 2,003,089 4,006,178 $456,684,000
    Ripp, Robert Officer 8,200 16,400 $1,869,600
    Riverso, Renato VP 108,982 217,964 $24,847,896
    Schwartz, Stephen VP 26,318 52,636 $6,000,504
    Thompson, John M Officer, Director 80,213 160,426 $18,288,564
    Vanderslice, James Officer 74,007 148,014 $16,873,596
    Vanvranken, Michael Officer 3,318 6,636 $756,504
    Wheeler, Earl VP 11,675 23,350 $2,661,900
    Zuckerman, Fred Shareholder 400,000 800,000 $91,200,000
    Totals 14,981,737 29,963,474 $3,415,782,000

    Three Billion, four-hundred fifteen million, seven hundred eighty two thousand, dollars divided up somewhat unevenly for "35" people, granted on June 30, 1998 and if sold at a share price for $114, June 30, 2008, in this example. No matter how you cut it, it is $3.4 Billion that is available to be removed from IBM assets and put in the bank accounts of "35" people.

  • Yahoo! IBM Employee Issues message board: "Re: $30 Billion dollars in IBM Stock Buybacks 2007 and 2008" by "Dwight Siebert". Full excerpt: It is certainly not your father's IBM. To quote Tom Watson Jr:
    I considered taking even more radical steps to increase IBM's commitment to its employees. Those at the top were doing fantastically well on stock options-despite the fact that Williams (Al Williams, then IBM President) and I stopped taking options in 1958, after Williams said, "We don't want to look like pigs." While IBM's workers were making good money, they couldn't look forward to the rich capital gains that executives with options had. I asked myself, "How much more am I worth to IBM than that guy down at the bottom of the pay scale? Twice as much? Sure. Ten times as much? Maybe. Twenty times as much? Probably not."

    Pg 311, Father, Son & Co.: My Life at IBM and Beyond, by Thomas J. Watson Jr.

    These folks are way beyond pigs...

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: $30 Billion dollars in IBM Stock Buybacks 2007 and 2008" by "mr_quarkwrench". Full excerpt: It is nice to see that it ONLY costs $30 Billion to manipulate the market so 35 people can make $3.4 Billion. They aren't greedy, they are only taking about 11%. If IBM had spent the $30 Billion on research, raises, stock dividends, COLAs for retirees or employee/retire medical care these hard working execs would have gotten nothing. That wouldn't be fair. -- Don
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: $30 Billion dollars in IBM Stock Buybacks 2007 and 2008" by "alwaysontheroad4bigblue". Full excerpt: Ah yes. Meanwhile, it was emphasized on a phone call I was on today that spending for education, supplies, software, and so on is still frozen (as it has been for as long as I can remember.) IBM can afford $30 billion for a stock buyback, but won't buy pencils and Big Chief tablets for its employees.
  • Yahoo! IBM Pension and Retirement Issues message board: "Question for the Board" by "ibmsr2d2". Full excerpt: I've been lurking for almost a decade. This is a great blog/group. This will be my first post. My question is pretty simple, yet quite complex.

    I've been a good performing employee in the company for almost 34 years. Mostly 1's and 2's.

    In the last year, however, I have lost faith in IBM and it's management. They have also lost faith in me as well. For the first time their business models don't make sense to me as well as to many of my colleagues. I realize it's time to go and believe me, I hope the best for those still working in the company but I think it'll be a problem to work there at least in the United States.

    In any case, I am very lucky and can retire, so I am planning to advise my management that I will retire on June 30. This is almost 120 days away.

    So the question is: If I call up the ESC, and give them the date and I hear it is then "cast in concrete", will I be able to move it up in the event of a major change in the retirement plan? Although the chances are remote, there could be for example a pension change announced let's say on April 1 just after I agreed to retire "cast in concrete" on June 30. Frankly, I don't trust (never have) the management of this company.

    Is there ERISA protection for those who decide to formally have a date to retire beyond the normal 90 days or should I just wait until March 30? I know this is a small deal compared to what many thousands have suffered here in the last decade.

    I also plan not to sign anything as I go out the door, no HR sponsored "remembrance book", etc. I have 2 patents and a half dozen more in application status, but I don't agree with their new confidentiality agreement "reminder". I'll just leave my badge and AMEX card on someone's desk and go quietly out the door to a new career, whatever it may be. Scary, but it's can't be worse than staying inside this mess that some called the "blue pig"!

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Question for the Board" by "madinpok". Full excerpt: If you are within 6 months of your planned retirement date, then it is a good time to call the ESC. When you give them a date, it is not binding. They will simply send you a retirement estimate, similar to what you get from the online pension estimator. If you decide to act on it, then you call them back and tell them which options you would like to choose (such as single life annuity, joint and survivor, etc) and then proceed to the next step, which is sending you the formal paperwork to sign. This paperwork has to do with committing to the payment options for your pension, and has nothing to do with resigning from IBM. Until you sign and return it, you can still change your mind on the date, or call the whole thing off. It will take about 1-2 months from when you return this paperwork until you receive your first payment.

    In parallel with this, your manager has to work with HR on your exit paperwork (i.e. your resignation from IBM).

    If IBM should announce something in the next few months, you can always change your retirement date. ERISA protects your vested benefits, so there is little reason to think that something would happen between now and June 30 that would force you to rush out the door. You are already retirement-eligible, your pension is already frozen and you aren't earning anything more, and IBM can't take away what you have already earned.

    One thing to think about as far as the date goes... if you retire on June 30, I don't believe you will receive any variable pay for 2008. But if you retire on July 31, you will receive a pro-rated amount. It's your choice as to whether you think it is worth it to hang around for an extra month.

    Be sure to use your floating holidays before you use any vacation days. And keep track of how many earned-but-unused vacation days you still have as of your retirement date, as IBM will pay you for those.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Question for the Board" by "thekanck". Full excerpt: I'll just make one comment.... I see no advantage to you in announcing your retirement so far in advance.... It might allow mgmt to take advantage of you somehow and offers no distinct benefits to you as far as I can see...... If I were you I would not give more than the standard 2 weeks notice to mgmt. Calling the ESC is fine and a good planning exercise, but I see no advantage to making an official announcement any more than 2 weeks in advance.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Question for the Board" by "About Hadit". Full excerpt: One thing they might do is to reclassify you to a lower band and/or cut your pay by 15%. That would allow IBM to cash out your vacation days based on the lower pay scale. It's things like that which is why you should not give more than 2 weeks notice. When I sent for my retirement package, management was never notified. Then they started a resource action and paid me a bunch to leave. Anything can happen between the time you call for your package and the time you quit. Just remember, if it's good for you, IBM won't do it.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Question for the Board" by "madinpok". Full excerpt: You are correct - IBM has frozen contributions to the pension plan. However, as you point out, both your monthly benefit and the lump sum can change. There are several things that cause these changes. Your retirement benefit is based on an age-65 pension value. That is the thing that is protected by ERISA. Everything else is derived from that value.

    As you age, the conversion factor that is used to calculate your monthly pension benefit decreases, causing your pension amount to increase slightly for each additional month you postpone starting your pension.

    The lump sum works differently. The lump sum is based on the age-65 value of your pension in 1999, when the cash balance plan was implemented. To calculate the lump sum value, a long term interest rate is used. This used to be the rate on 30-year bonds, but when the Pension Protection Act was signed into law in 2006, it allowed companies to switch to using an interest rate based on high quality corporate bonds, which is generally higher than the 30-year bond rate. This causes the value of the lump sum to decrease. The phase over to the corporate bond rate is being implemented gradually from 2008 to 2012, and you can expect the lump sum value to decrease over that time.

    In addition, the pension protection act also switches to new mortality tables, which also have an effect on the lump sums. Note that the change in interest rates and mortality tables does NOT change your monthly annuity amount. They only affect the lump sum amount.

    Here is a recent article on this: http://www.kiplinger.com/magazine/archives/2008/03/lump-sum-payout-vs-distribution.html

    It is my understanding that IBM has been updating the interest rates only once per year, at the end of the year. I'm not sure if this has changed or not, but it might be that it has. Finally, as has been mentioned before, the lump sum is often a poor deal for employees who are not close to age 65 and have a normal life expectancy, as it gives up the early retirement subsidy which can be quite valuable.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Question for the Board" by "m_l_benefit_seeker". Excerpts: Take all of your holidays first, before vacation, not just your floating holidays. Holidays are given to you as of the first of the year, not accrued as vacation is. I'm retiring next Friday, 2/29/2008, and I've used all 12 of my holidays, and will be paid for 2/12 of my vacation.

    Also, it may be to your benefit if your salary is cut 15% before you leave. The summary plan description indicates that if your salary is cut more than 10%, you are eligible for a severance package.

    In addition, you are not required to give advance notice of your retirement, it is done as a courtesy to IBM for planning. At least 45 days has to elapse before a 1st day of a month for you to receive your pension, although you will receive retroactive pay. As an example, I told HR on January 15th that I'm retiring on 2/29, but I will not be paid until April 1, not my first retirement day on March 1st. I will receive retroactive pay for March on April 1st, in addition to my April payment, because they want the signed paperwork with your payment choices at least 45 days before your first check. Good luck with your decision.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Question for the Board - Thanks" by "ibmsr2d2". Full excerpt: First of all, thanks to all of you on this board that volunteered the many valuable responses to my query. It's a hell of a legacy for a company and its leadership that after 33 years of service in IBM I trust the well meaning anonymous responders on this blog more than any managers in the company and certainly anyone of the crew of IBM HR.

    After 33 years of 1 and 2 appraisals and doing what I thought was the right thing, I was not very surprised to get my first "3" in 33 years but I was surprised to be threatened with getting managed out of the business. In the past, I'd search out another job and transform myself once again, but the "new IBM" is not about creating employees with great broad expertise, it's about using up people in a narrow job and getting rid of them once they get tired, sick, obsolete or irrelevant. You can't grow technically or intellectually here anymore. It's also about adulation of management, much like hollywood stars and politics. These guys really think they are infallible gods as they reach the VP levels.

    During last year, another division requested my well publicized and very specialized expertise in a particular industry and set of technologies. When asked to help, I immediately did so (with management approval) went out of my territory and closed some more business for them. In 2008 they asked for more help and when my management refused they just escalated and blew them away. It turns out they now hold that against me. At least I'll get canned for doing the right thing! One colleague said "You are committing career suicide. Go ahead and enjoy it, you have nothing to worry and you'll do better outside of IBM!" I've agreed to work as a subcontractor for the other division if I get canned out of IBM.

    Interesting point on the 15% cut triggering a severance package. Although I'm not involved (I was an IT Networking Architect for at least 10 years in IGS and now an SSL in IGS GTS sales) I've passed this tidbit to some of my old delivery friends and at least one has acted on that tip.

    I've disclosed my decision to a couple of friends and have been pleasantly shocked at their reactions. More than one suggested that I just sit on my ass and encourage management to give me the "3" package of 13 weeks pay and CORBA which will save me money over the FHA theft victim rates for a year. One potential new employer and friend even said "Go for it! Let them fire you! It doesn't hurt a bit - it may even make your resume look better - and you can take some more money from the bastards as you go out the door!".

    Another good friend, and well known past poster (by his ID) here, just said "Well I'm happy you have decided to wean yourself out of that meagerly paycheck. Now we have to work on weaning the IBM thinking out of you so you can be successful out there!". I've received 3 unsolicited job offers and calls to interview at HP, Cisco and an IBM Business Partner.

    I'm not taking the lump sum because actuarially it is essentially another attempt of theft from management and my health seems good. Here's my steps: 1) I've decided to not formally announce my retirement to my management until the last minute, maybe 30 days to 2 weeks out. I don't hate them, I just can't understand the business model they are operating. I really think they are powerless to do much anyway. 2) I am requesting a pension estimate from the ESC this week. 3) I'll clean up my admin stuff and making sure I'm ready to leave at a moment's notice in case I'm lucky and get a severance package. 4) I'll take all of my holidays ASAP. 5) Since I'm mobile, I have no worries about an office, but I think I'll stock up on office supplies.

    Thanks for the help, folks.

  • Forbes: Why Your Wallet Feels Thinner. By Melanie Lindner. Excerpts: The U.S. Federal Reserve has been slashing interest rates to stave off a recession. One potential risk to that strategy: inflation. The bad news is that prices for many everyday items had already been ticking up, according to data from December 2004 and December 2007 collected by the U.S. Department of Labor. During that period, the Consumer Price Index, which measures the average change in prices over time for a basket of consumer goods and services, grew at a 3% annualized clip. But prices for many everyday items are rising even faster--and that's making everyone's wallet feel a little thinner. ...

    "It's all well and good for [Bernanke] to say there's no inflation, but that's just not the case for the supermarket shopper or the average person filling their gas tank," says Arthur Hogan, an analyst with Jefferies and Co., an investment bank. Hogan believes the Fed is more concerned with the dangers of an economic slowdown than inflation. ...

    But lofty prices don't just loom in the grocery aisle and at the gas pump. Look closely and there are pockets of inflation across many sectors of the economy. ...

    Then there's the real killer: health insurance. Since 2001, insurance premiums have jumped 78% for family coverage, far outpacing inflation, according to research by the Kaiser Family Foundation, a Washington, D.C.-based health care policy research foundation.

  • Forbes: The Best And Worst Companies For Customer Satisfaction. Tom Van Riper. Excerpts: When tumbling home values and high gas prices already have consumers spending less at stores, car dealerships and airline ticket counters, how does a company minimize the pain?

    One way is to offer superior customer service, the better to compete for the fewer number of dollars out there, and set yourself up with loyal customers for the inevitable economic rebound. A new report finds a lot of companies like Wal Mart and Home Depot seem to have a different plan. ...

    Cutting back on service is an easy way to save a buck when things slow down, but it's also short-sighted. Gruca is putting the finishing touches on a follow-up report that measures a firm's willingness to invest in service and spruced up stores against long term profitability growth. He doesn't have final numbers yet, but he says the preliminary results show a strong link.

  • USA Today: Turning 62: Have your retirement cake and eat it, too. By Sandra Block. Excerpts: Most financial decisions require trade-offs. If you want to earn better-than-average returns in the stock market, for example, you need to tolerate above-average risk. Similarly, an adjustable-rate mortgage offers lower initial payments than a fixed-rate mortgage. But if interest rates rise, you and your furniture could end up on the sidewalk. America's oldest baby boomers, who are turning 62 this year, face similar trade-offs in deciding whether to claim their Social Security benefits early. A little-known Social Security option, though, gives early retirees a way to have their cake and eat it, too.

    Here's the quandary: If you claim benefits at 62, you can retire while you're young enough to enjoy it, but you'll receive reduced benefits for the rest of your life. By contrast, waiting to file until at least full retirement age (66 for boomers who turn 62 this year) will increase your monthly payments, reducing the risk that you'll run out of money in your old age. For many boomers, though, that means working longer — a hard pill to swallow if you hate your job and want to spend more time with your grandchildren.

    What most retirees don't realize is that they can change their minds. Under the Social Security Act, individuals who receive early-retirement benefits from Social Security can withdraw their application, repay the benefits they've received and refile for higher benefits at a later date, says Mary Jane Yarrington, senior policy analyst for the National Committee to Preserve Social Security and Medicare.

  • Financial Week: IRS wants to tax golden parachutes. Its proposal would mean rewriting most pay contracts. By Jeff Nash. Excerpt: A tax ruling last week by the Internal Revenue Service could bring an end to the controversial practice of granting golden parachutes to top executives who are pushed out amid corporate failures. Under a tax rule known as Section 162(m), compensation of more than $1 million each to the CEO and three next top-paid executives, excluding the CFO, is not deductible unless it is performance-based, or tied to a target such as earnings growth. While it’s not stated in the rule, the IRS for more than a decade has permitted arrangements to be considered performance-based even if they had a provision that allows for the payment or vesting of an award—regardless of achieving a financial goal—upon the firing of an executive without cause or as the result of a resignation.
  • eSchool News: Gates to students: Consider IT careers. Chairman says Microsoft is forced to look for talent in developing countries. Excerpts: A widespread shortage of information technology (IT) graduates across North America is forcing Microsoft Corp. and other software companies to look to developing countries such as China to meet their needs, Microsoft Chairman Bill Gates says.

    When we want to hire lots of software engineers, there is a shortage in North America—a pretty significant shortage,” Gates said in an interview with The Associated Press. “We have this tough problem: If you can’t get the engineers, then you have to have those other jobs be [relocated to] where the engineers are.”

  • Yahoo! IBM Employee Issues message board: "Re: Bonus CEO says significant increase? I didn’t see an increase" by "Mike". Full excerpt: That is what I have been told in the past as to the bucket system. Like the PBC system your dollar percent may vary with how much the manager likes you and not how well you actually did your job. Just the nature of the new IBM beast.

    30 years and a raise every year? Unheard of in my project !!!!! GDP every year but nobody has gotten a raise every year in a long, long time. The best in the area average about every other year for the past 6 years. The "below best" are starting to starve. Some even cutting into their 401Ks to make ends meet.

    It would appear in my area that the death spiral is out of control. Management screwed too many people and morale went to hell. The carrot no longer means anything and it shows in the work. Clients hit the pavement and the grunts could care less. You can only be beat up so many times. Now PBC's will drop further, moral will drop further, clients will drop. Soon it will just the first line and second line wondering what happened.

  • MSN Money: The year's scariest investing news. A federal agency rolls the dice to fund busted pension plans, showing that the gambler's thinking that got us into the housing and credit mess is alive and well. By Jim Jubak. Excerpts: What's the scariest investing story of 2008 so far? It's not news that the median price of a new house is down 17% from its 2007 high --- and still falling. Or that Miami has a 37-month supply of unsold condos, with 19,000 more new units set to hit the market this year. Or even that losses at banks and investment banks in the debt-market meltdown could hit $400 billion.

    Here's my nominee: The Pension Benefit Guaranty Corp., the government agency that protects the pensions of 44 million workers in case their employers can't (or won't) pay promised benefits, has announced that to avoid going bust it will double the percentage of its portfolio -- to 45% -- that it puts into stocks. An additional 10% will go into alternative investments, including hedge funds.

    In other words, facing a $14 billion deficit and even larger projected shortfalls, the Pension Benefit Guaranty Corp., or PBGC, decided not to save (by raising premiums) or to live within its means (by cutting benefits) but to gamble in the financial markets by taking on more risk. The PBGC was so proud of its new strategy that it announced it on Presidents Day, when the U.S. financial markets were closed and almost no one was paying attention.

    So why is this so scary? Because as a result of 10 years of booms and busts -- the Asian currency crisis, the Long Term Capital Management hedge fund disaster, the tech stock bear market of 2000-02, the housing smash-up, the debt market debacle -- I've increasingly come to believe that those of us who play by the rules (work hard, live within our paychecks, save) are chumps. The way to get ahead is to gamble big and then, if you lose, find someone to cover your losses.

  • The Huffington Post: Bill Buckley. By Bill Curry. Excerpts: Bill Buckley died Wednesday at 82 at his home in Connecticut. He was the most influential public intellectual of his generation in this country, maybe the world. More than anyone, even Goldwater or Reagan, he was the father of modern conservatism, which was as much an intellectual as a political movement from 1955, when he founded the National Review, to 2000 when, under Bush and DeLay, the movement foundered in a sea of law breaking, war mongering and greed.

    Buckley loved debate. Unlike today's cowardly conservatives, he debated the best minds he could entice on to a stage. He never used his opponents as props or punch lines for fixed fights. He liked them. Loving his own ideas, not just hating theirs, left room for liking them. ...

    To get out of Iraq or into a new health care system will require some hard fighting, but also some hard thinking and most of all reasoned arguments to persuade, if not the opposition, certainly the public. If you want to see how far we are from having that kind of debate, watch an old episode of Firing Line and then watch a random hour of live cable television. That's how far.

    Bill Buckley raised an army against a liberal establishment. Like Barry Goldwater, he often dissented in later years from a conservative establishment he helped create. The political debate Buckley launched is over, many of its old categories defunct. To shape a new debate we'll need at least a few people with the intellect, humanity, civility and great good humor of Bill Buckley. I hope we find them.

  • New York Times: Is a Lean Economy Turning Mean? By Peter S Goodman. Nicole Flennaugh has a college degree, office experience and the modest expectation that, somewhere in this city on the eastern lip of San Francisco Bay, someone will want to hire her. But Ms. Flennaugh, 36, a widow, cannot secure steady, decent-paying work to support herself and her two daughters. Nearly two years after she was laid off as a customer service representative at the Educational Testing Service, and even after applying for dozens of full-time jobs, she has been getting by with occasional stints as an office temp.

    “You’re used to making $17 an hour with benefits, and now you have to take any job for $8 an hour,” Ms. Flennaugh says. On a recent afternoon, she sat in front of a computer terminal at an employment center in a gritty part of town, scrolling dejectedly through online job listings while sending another batch of applications into the ether. “I’ve literally sat and cried, but my friends with double degrees are doing worse,” she says. “It’s the economy. It’s really bad.” ...

    Across the nation, the labor market has been deteriorating. Many companies, long reluctant to add workers, are hunkered down and waiting for improved prospects, engaged in what Ed McKelvey, a senior economist at Goldman Sachs, calls “a hiring strike.” Americans with jobs are taking cuts to their work hours; those without jobs are staying out of work longer, or accepting positions that pay far less than they earned previously. ...

    Indeed, the increasingly anemic job market comes on the heels of six years of economic expansion that delivered robust corporate profits but scant job growth. The last recession, in 2001, was followed by a so-called jobless recovery. As the economy resumed growing, payrolls continued to shrink.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Los Angeles Times: Medicare trend raises eyebrows. Employers are shifting costs -- and more burden -- to a federal program, critics say. By Ricardo Alonso-Zaldivar. Excerpts: Many large employers are struggling with the obligation to cover the rising medical costs of retirees, but last year officials in Michigan found a way to save at least $40 million on care for retired teachers and other public-school workers: Send the bills to Washington. Almost overnight, by taking advantage of a little-understood feature of Medicare, the school retirement system shifted a big chunk of the healthcare costs of more than 100,000 retirees off its budget and onto the federal government. This year, the state is shifting its civil service retirees too. ...

    Michigan is not alone. Across the country, state and local government agencies, big nonprofit organizations and major corporations are rushing to do the same. One result is that the Medicare trust fund is evaporating even faster than expected. At the heart of what critics say is a major cost-shifting maneuver is a program called Medicare Advantage, which pays private insurers a bonus to take over Medicare coverage for seniors.

    The payments to the private insurers average more per senior than the cost of care with regular Medicare. The bonus payments enable insurers to offer features that seniors in regular Medicare don't get.

  • Wall Street Journal: Employers Explore Health-Care Options. By Victoria E. Knight. Excerpts: David Martin, owner of Accucam in Coopersville, Mich., thought he had run out of health-care options for his workers when MEGA Life & Health Insurance Co., the provider of Accucam's group health plan, dropped its coverage. Premiums had doubled the prior year, and participation dwindled to three of 15 workers. So instead of providing group insurance, Mr. Martin is offering allowances -- such as contributions to health-savings accounts, or HSAs -- to employees who buy their own coverage in the individual market. Other small and medium-size employers are also providing stipends to workers who buy their own coverage through similar defined contribution programs. ...

    Individual policies are portable, so workers don't have to worry about losing coverage if they change jobs. Plus, employees keep the funds in their HSAs, he says. Critics say workers with health problems may end up paying very high premiums, face exclusions for existing medical conditions, or wind up without insurance in the state-regulated individual market -- challenges not faced in group plans. In addition, when adopting novel ways of providing benefits, employers need to be mindful that they comply with state and federal laws. ...

    Karen Politz, a research professor at Georgetown University's Health Policy Institute, is one of the skeptics. Some 30 states have high-risk pools, but the premiums can be as much as double the usual rate. And some, such as in Florida, are closed to new enrollment because of lack of funding. Fewer than 200,000 Americans are covered through high-risk pools. As a coverage option, says Ms. Politz, "It's a fig leaf."

  • New York Times: 2 Plans and Many Questions on the Uninsured. By Kevin Sack. Brandy Coons is what health economists call a free rider. She may not fully appreciate it, but her decision to go without health insurance, like millions of similarly situated Americans, has become central to the pre-eminent policy dispute of the Democratic presidential campaign.

    Ms. Coons, a 23-year-old waitress who rents a room and rarely eats out, said she could probably afford a high-deductible policy if she gave up her gym membership and spent less on her amateur photography. But she chooses instead to gamble against the odds of confronting a bankrupting catastrophe.

  • New York Times: Insurance Fears Lead Many to Shun DNA Tests. By Amy Harmon. Excerpts: Victoria Grove wanted to find out if she was destined to develop the form of emphysema that ran in her family, but she did not want to ask her doctor for the DNA test that would tell her.

    She worried that she might not be able to get health insurance, or even a job, if a genetic predisposition showed up in her medical records, especially since treatment for the condition, alpha-1 antitrypsin deficiency, could cost over $100,000 a year. Instead, Ms. Grove sought out a service that sent a test kit to her home and returned the results directly to her.

    Nor did she tell her doctor when the test revealed that she was virtually certain to get it. Knowing that she could sustain permanent lung damage without immediate treatment for her bouts of pneumonia, she made sure to visit her clinic at the first sign of infection

    But then came the day when the nurse who listened to her lungs decided she just had a cold. Ms. Grove begged for a chest X-ray. The nurse did not think it was necessary. “It was just an ongoing battle with myself,” recalled Ms. Grove, of Woodbury, Minn. “Should I tell them now or wait till I’m sicker?”

    The first, much-anticipated benefits of personalized medicine are being lost or diluted for many Americans who are too afraid that genetic information may be used against them to take advantage of its growing availability. In some cases, doctors say, patients who could make more informed health care decisions if they learned whether they had inherited an elevated risk of diseases like breast and colon cancer refuse to do so because of the potentially dire economic consequences.

  • New York Times: Health Coverage Often Stops at the Campus Gate. By Tanya Mohn. Excerpts: Parents often do not think twice about health coverage when their children head to college, but it might be to their advantage to take a second look before doing a double-take when they see their bills. They may wind up paying double or triple for campus health care, said James A. Boyle, president of College Parents of America, a nonprofit group based in Arlington, Va., that provides support and advice for parents of college students. On most campuses, a family’s insurance plan “is effectively worthless,” Mr. Boyle said. It goes unused, he said, because most colleges do not process standard health insurance.

    Andrew Menter, founder of the Highland Campus Health Group, a company that bills and collects third-party insurance for college health centers, estimated that only 2 percent to 3 percent of centers nationwide are in-network providers with the large insurance carriers.

    Campus health centers traditionally have been financed through tuition, general fees or specific health fees, allowing the same access for all students. More recently, a fee-for-service approach has become increasingly common. As a result, parents who are already buying their own insurance may have to pay substantial health fees and out-of-pocket costs for lab tests and X-rays.

    Students could pay for health services themselves and then file for reimbursement from their insurance companies, but Mr. Menter said only about one in eight claims is reimbursed for out-of-network providers. And when they are paid, he said, it is sometimes for a fraction of the charge.

  • New York Times: Constraining the Medicare Debate. Excerpts: The Bush administration has just made several proposals — some sensible, some not — to reform Medicare financing and spending. Unfortunately, the exercise is seriously hobbled by an ill-advised 2003 law that prevents consideration of some of the best and fairest ways to begin fixing Medicare.

    The 2003 Medicare prescription drug law requires that no more than 45 percent of total Medicare expenditures be paid for by general revenues, drawn mostly from the progressive income tax. (The other main funding sources are payroll taxes and beneficiary payments.)That restriction means that Congress can’t bolster Medicare with money generated by closing corporate tax loopholes or letting the president’s tax cuts for the wealthy expire. Those sensible steps would increase the amount of income tax supporting the program — pushing it over the arbitrary 45 percent cap. Instead, as health care costs rise and the population ages, the program will have to reduce services and reimbursements or find additional revenues elsewhere. ...

    The administration has made no effort to reduce the lavish and unjustified subsidies granted to the private health plans that participate in Medicare. Eliminating them could save Medicare far more general revenue money than reducing drug-program subsidies would. Medicare needs to be reformed, but that debate should not be artificially constrained. Congress needs to focus on ways to restrain the relentless rise in health care costs that is bedeviling all health insurers, including Medicare. Congress and the administration need to be able to consider all possible sources of revenue for Medicare — on their own sound and equitable merits.

  • Physicians for a National Health Program: Mythbusting Canadian Healthcare, Part II: Debunking the Free Marketeers. By Sara Robinson. Excerpts: In the previous post, I looked at ten of the most common myths that get bandied about whenever Americans drag Canada into their ongoing discussions about healthcare. In this follow-up, I’d like to address a few of the larger assumptions that Americans make about health care that are contradicted by the Canadian example; and in the process offer some more general thinking (and perhaps talking) points that may be useful in the debates ahead. ...

    In America, a lucky employee with gold-plated employer-based coverage may well get access to A-level care (though that level of coverage becoming rarer by the month, even among the professional classes). On the other hand, about 50 million under-insured Americans are barely scraping by with C or D-level care; and the nearly 50 million with no insurance at all get next to no care whatsoever. Worst of all: 18,000 Americans die every year due to lack of access to healthcare. That’s one every 30 minutes, around the clock, every day of the year — the equivalent death toll of six 9/11s every single year that passes.

    In Canada, everybody gets at least B-level care, pretty consistently across the board — and, on occasion, quite a bit better than that. You might not like those odds if you’re one of the shrinking handful of Americans who’s used to A-level care; but if that’s not you, you’d be getting a much better deal in Canada.

    The private sector has had 20 years to prove that it could deliver low-cost, quality care using those vaunted business-style efficiencies; and it has failed us utterly and completely. This fact should be the ultimate nail in the coffin of the old conservative canard that “the free market always does it better.” If that was true, privatizing health care would have been the shining example that proved it once and for all. Instead, all we got was a colossally expensive national disaster that’s denying full coverage to a third of the country — and putting our health, competitiveness, financial and social capital, and national security at risk in the process. It’s also devastating the aspirations of our entire middle class, which is being hollowed out by our current health policies.

    A famous Hebrew prophet once advised his followers to take the log out of their own eyes before trying to remove the splinter from someone else’s. As much as it hurts American pride to admit it, Canada and the rest of the industrialized world has us roundly beat on this one. Those who are so quick to criticize the Canadian system might be better off holding their fire until they’ve shown us they can do better. America, and the world, is waiting.

  • Wall Street Journal: Health Insurers Address Issue Of Nixed Policies. To Counter Negative Publicity, Industry Pushes Plans to Let People Appeal Cancellations. By Rhonda L. Rundle. Excerpts: The health-insurance industry is racing to defuse a growing furor over retroactive policy cancellations that have saddled some patients with big medical bills and sparked lawsuits. ...

    The efforts, which are getting a largely positive reception from consumer groups, are emerging amid public outrage in several states against insurers that have voided policies after the beneficiaries started racking up large claims for cancer or other serious illnesses.

    Last week, an arbitration judge in California awarded $9.4 million, mostly in punitive damages, to a hairdresser whose medical coverage was canceled by Health Net Inc. The insurer, which acted while the woman was undergoing treatment for breast cancer, claimed that she had falsified information about her weight and failed to mention a heart murmur. The judge ruled that Health Net's conduct was "reprehensible" and unlawful. ...

    Last year, the Connecticut attorney general's office investigated complaints about coverage denials by units of Assurant Inc. In one case, the company refused to pay a 34-year-old woman's bills after she was diagnosed with Hodgkin's lymphoma, according to the attorney general's office. The insurer claimed she had a pre-existing condition because during a postenrollment doctor's visit she recalled experiencing mild shortness of breath while exercising six months earlier, the office said. Under a state order, the company's decision was later reversed and the woman's claims were paid.

    "The stories are heart wrenching of people who have paid their money and are relying on the care they paid for, only to have the rug suddenly pulled out from under them," said Betsy Imholz, special projects director at the nonprofit advocacy group Consumers Union.

  • New York Times: Private Medicare Plans’ Cost Questioned. By Robert Pear. Excerpts: Private Medicare plans often cost beneficiaries more than the traditional government-run Medicare program, Congressional investigators say. Many private plans advertise extra benefits and low costs. But in a report to be issued Thursday, the Government Accountability Office, an investigative arm of Congress, says that many people in private plans face higher costs for home health care, nursing homes and some hospital stays. ...

    The report says, “Medicare spends more per beneficiary in Medicare Advantage than it does for beneficiaries in the original Medicare fee-for-service program, at an estimated additional cost to Medicare of $54 billion from 2009 through 2012.” ...

    Medicare makes substantial contributions to the earnings of insurers like Humana and UnitedHealth. Representative Pete Stark, the California Democrat who is chairman of the Ways and Means Subcommittee on Health, said, “Medicare overpayments fatten company profits, even as many seniors face higher costs in private plans than they would in traditional Medicare.”

    Democrats tried unsuccessfully last year to cut Medicare payments to private plans. CIBC World Markets, an investment bank, predicted last month that “Humana and the Medicare industry will have at least two years, and probably three years, of continued strong enrollment and earnings growth.”

  • New York Times: Aetna Backs Off a Colonoscopy Change. By Barnaby J. Feder. Excerpts: Bowing to critics who contended it was putting profits before patients, Aetna said Wednesday that it had suspended — at least temporarily — a plan to stop paying for routine use of a powerful anesthetic in a procedure to screen for colon cancer. The drug, propofol, provides quick and reliable sedation for patients who are undergoing a colonoscopy, an examination of the lower intestine with a flexible probe that provides the most thorough form of screening for colon cancer. ...

    Critics had said that restricting use of propofol would discourage patients from undergoing a colonoscopy. Cancers of the colon and rectum trail only lung and prostate cancer in cancer deaths among Americans, according to the Centers for Disease Control and Prevention, but survival rates are high when they are caught early. ...

    The American Gastroenterological Association, a medical society representing the doctors who perform colonoscopies, had recommended that Aetna defer its plan and praised the company on Wednesday. But the battle is far from over. Aetna said that it expected the Food and Drug Administration to approve new devices or drugs that would allow it to revisit its coverage as soon as this summer with the support of doctors who perform colonoscopies.

New on the Alliance@IBM Site:
  • Alert: Be aware that IBM is blocking e-mail from the endicottalliance address to IBM internal e-mail and filtering from employee to employee with the term Alliance@IBM
  • Tell IBM to rescind employee pay cuts. Effective February 1st, IBM unilaterally reclassified 7600 employees from exempt from overtime to non-exempt AND cut their pay 15%. IBM is also rebanding employees to lower bands which will also affect future wages. IBM Executives are meeting with employees around the country who are getting their salary cut. Is this simply damage control?

    Keep the Pressure on! Take a stand! SAY NO to Pay Cuts! Tell me more...

  • Plan Now! Make your voice heard at the IBM Stockholder meeting April 29th in Charlotte, North Carolina. Details to follow...
  • From the Job Cuts Status & Comments page
    • Comment 2/22/08: These re-classification meetings are an interesting development. They may be triggered by a legal audit exposure that HR forgot. It's a SOX violation (as well as fraud in many states) to bill more hours than an hourly employee gets paid. Since they've cut a lot of hours, so have billings. This must have hurt the financial numbers and outlook for revenue generation in the quarter.

      First of all, you don't have to attend unless you are directed by your line management IN WRITING to attend. You can't be accused of insubordination for not attending if your P/A holding manager has not formally directed you to attend. You don't report to HR or to legal and they can't force you to do anything. They can only force something if they have found you are doing something illegal and the action must be altered or stopped.

      Second of all, if an IBM attorney attends, then in some states you have the right to legal representation if the attorney is present and performing as an attorney. You also don't have to sign any documents unless you have time to review them. Make sure if they are legal documents that there is a notary there as well (another witness) that is not beholden or representing one of the parties (IBM). Don't fall for them asking you to sign and "we'll get a notary later". In some states that's illegal. Tell that to the attorney's face. Ask the attorney "Do you as a member of the state bar agree that a notary is not required to be present to witness this document?" and that'll get them thinking.

      I refused to attend my re-classification meeting. My response stated that I'd be happy to attend if I was allowed my legal representation or if I was allowed to videotape the meeting. I'm not in a hurry to be re-classified again. -Something Smells in HR-

    • Comment 2/24/08: Hey.... If you have been working 50 - 60 ... 80 hours per week to get the work done and been reclassified to hourly ... and now IBM is caught between having to: 1) Pay you 150% or more of your prior salary; 2) Tell the customer things are in the toilet; 3) Admit their "mistake" and reclassify you as exempt, I think they take "door #3" if this is a long-term contract. Try this: REFUSE to be reclassified.... see what happens next???? -hosed-
    • Comment 2/25/08: I stated this when it first started. The intention is to cut folks by 25%.. and as high as 35% The next group will be the 08A folks, they will see the same effort on rebanding them. It's not any brighter for folks in my level or group. I have spent years at this company and watched painfully, as they have literally screwed the very ones that are the backbone of this company.

      It's the select few in upper management that are causing all of this as well. As one famous female of the group has stated to the ranks, "It will be like putting a square peg into a round hole. Keep POUNDING until it fits"

      There is a drive to make the books look very good. They have been working with a consortium based in India for selling Global. Don't expect the fear mongering to stop when we sell either. The new group will look to level set FTE expenses with what it pays in other countries...cost of living is not a factor.

      I am close to my retirement so I am putting in my time. I am sorry for those that are affected. The pay cuts are looking at an average of 26% now, versus the 32% that what the average prior. Select few didn't comprehend the billing factor (snicker), as far as legal exposure. They made money hand over fist when the bill over approx 48.00 because your salary is covered at that point, the rest is cream to pull off the table into the books at 100% Best wishes to everyone -insider-

    • Comment 2/25/08: You know, today starts the 4th week of this pay cut BS. Not only was it a slap in the face the way they went about it; It is also insulting the way I am now treated. I have never in my career here been a clock watcher, but I AM NOW! I am beginning to like that I get a lunch away from my desk; that I can make plans with my family in the evenings, and that my weekends are mine. Sure the 15% hurt in the wallet and I have adjusted . Now I am not sure if I want to return to unlimited overtime at no extra pay. -*** BOHICA ***-
    • Comment 2/25/08: The IBM senior executives have discovered that in order for IBM to be competitive, they either need to cut executive bonuses or employee salaries. As they are the only ones with a say, guess which option they chose! Its just like Congress. I do not remember them ever voting down a pay raise for themselves. Get a seat at the table and a say in salary. Live better work union. -Exodus 2007-
    • Comment 2/26/08: My immediate "team" is 4 IBM'ers and a contractor. All 4 of the regulars were affected by the pay cut. Got a note from one of the regulars that he's leaving. found out today that it wasn't by choice. Also found out that the team lead interviewed 3 people from Brazil. Wonder which of the 3 of us regulars will be next? -no hope-
    • Comment 2/26/08: The executives are planning to fatten their wallets after the stock rises following that $15B buyback. Watch the insider trading. -Sick of it-
    • Comment 2/28/08: There is no such thing as location anymore. Most all of us work from home and we are spread all over the US and beyond. These RA's are happening in ITD, delivery...that I know of. -just1waiting- Alliance reply: We agree; However, knowing the city, state area is still important to us, for obvious reasons.
    • Comment 2/28/08: An IBMer in IGS/ITG told me today that their manager called today to say there is a resource action going on now but no one from their team was affected.. -sucking_sound-
    • Comment 2/28/08: STG is having a resource action of 100 people today. 30 days to find a job or out March 31. z announcement teams were effected. -Anonymous-
    • Comment 2/28/08: I received a call from my first line to inform me about the resource action and that our team would be affected. It's sad because everyone is already working overtime from the last time our headcount was reduced. We work hard and are awarded with pay cuts or resource actions so we work harder. IBM will spend 15 billion dollars to raise earnings per share by 5 cents (which is really just subsidizing their huge stock option compensation to upper management) but they are divesting in their employees and infrastructure.. -Anonymous-
    • Comment 2/29/08: I was the victim of a resource action yesterday. I will be out the door March 31st if I don't find something internal (slim chance of that). I work in Global Services as a xxxxxxxxx Div xxxxxx. I am the only one I know of in my department that was targeted. I am a Work-at-home employee attached to Poughkeepsie. -Anonymous-
    • Comment 2/29/08: 12 project managers let go. Various locations Boulder and Chicago. More rumors going on about rebanding 08A family as well. We have heard it from internal sources and on this board. At least those who are RA'd will get a severance package. Sad but true its becoming better to be gone from this living hell. -shame on sam-
    • Comment 2/29/08: Just informed by my friend in Seattle that he and 6 others on his team have been RA'd. All 08A family... -RA'd-
  • General Visitor's Comment page:
    • Comment 2/21/08: "AIS Team, -

      As we have started the New Year I wanted to take a moment to thank each of you for your hard work in 2007. As the “In the Public Eye” newsletter mentioned in the email from this weekend, we made some good progress in 2007 but did not quite meet our objectives. I truly appreciate your efforts throughout 2007. I especially want to thank those of you who sacrificed some of your vacation time to contribute to the year end proposals the Government and other industries prior to the holidays. We had a number of significant new business wins in 2007, and are looking forward to an even stronger 2008.

      While AIS had a number of strong wins and excellent delivery performance across a number of clients last year, 2007 AIS practice results were less than plan in several areas. We had a tough year with utilization challenges and finding qualified resources to join our team as well as some deals moving out to 2008. As we now have started 2008, I need your help and attention to various elements that significantly impact the success of our business. We can have a great 2008 with just a little effort on all of our parts and drive year-to-year growth.

      As we prepare for these our 2008 challenges, I wanted to share with you some important policy information on capacity for Public Sector. Please ensure you read the information carefully and if you have any questions or need additional information, please contact your SAM, 2nd line or SAL or Delivery Executive.

      Chargeable Hours. Over the last several years, the Sector’s overtime utilization (defined as the total amount of productive hours charged) has eroded from 110% to our current 107.2%. This erosion has led to a decrease in labor hours and higher labor rate costs. In addition, administrative and bid and proposal (B&P) labor hours and costs have increased as we pursue a number of new business opportunities. In order to maintain affordable labor rates for our customers, increase sector profitability, and increase available B&P, we need the following actions from each of you in 2008: 1) increase project charging to a minimum of 44 hours in all possible cases and 2) drive 10-15% overtime with billable (preferable) or non-project activities such as B&P, marketing, education, and investments. This capacity model allows us to meet our business targets and still accommodate planned time away for education, vacations, and holidays. This model is consistent with what is being driven across our other Public Sector practices.

      A minimum 44 hour work week is standard across most industries, particularly the Consulting Services and IT Industry. We find that many of our practitioners are already charging a minimum of 44 hours per week. However there is many that are restricted to 40 hours by their project. In 2008, Public Sector has launched an initiative that will engage our Delivery Executives and Project Management teams to further promote the 110% capacity business model that includes reporting overtime hours for client billable, B&P, education, and other internal investments. Effective immediately all staff should submit their weekly time sheets with no fewer than 44 hours per week (unless you are out on vacation or are ill). If you are unable to charge at least 44 hours to your project you should contact your SAM or 2nd line to discuss how we can work with you and your project teams to accommodate this.

      As a reminder, you should always charge all hours worked, whether these hours are Contract, Bid & Proposal, MOS, Authorized Education, Internal Project or Authorized Overhead When staffed full time on a project that is not capped to 40 hours per week, you should work and charge a minimum of 44 hours per week to the contract. When staffed on a contract that is capped at 40 hours per week and you are not working more than 40 hours, then you should charge 40 hours to the contract and a minimum of 4 hours to other activities such as Bid & Proposal work, Internal Projects, and/or authorized Education.

      We are planning a large AIS networking and education event for later this year to provide technical training to a large audience in AIS. In order to have this event we need 1Q to start off with strong AIS business results.

      Hours Plan: Each month, our practice is asked to forecast our utilization and headcount to the Public Sector and GBS leadership team. Your monthly hours plan is critical to that practice forecast. In 4Q 2007, we had over 200 of these plans that were not completed which meant 0% utilization was forecasted for those individuals in hours plan; this also meant our forecast reporting was not nearly as accurate as it could have and should have been. With over 1400 people in AIS, we need each and every person to complete an accurate forecast in hours plan. Hours plan forecasts as well as timely submission of timecards each week is very important to your personal performance as well as to the practice performance, and subject to our Public Sector“Administrative Good Standing” policy. If you have any problems working with hours plan, please contact your RDM or manager for assistance.

      Current RDM Support is as follows: Barbara Pylant Lead RDM and Manager for all AIS RDMS RDM for O&M under Diane Chan and all of Brian's direct reports Jennifer Kramer AD - All people under Linda Zweibel Marisa Hart AD - All people under Milt Harrison Theresa Poffenberger Architect team under Stas Tarchalski and the Delivery teams under B. Koeritzer, W. Zeek, J. Wilcox, J. Thomas, W. Joyner, and T. O'Rourke Michelle Arena All of Security and Privacy under John Lainhart Diane Berry-Brownhill All of IOD under Suresh Kripalani James Newcomb TS&OS under Gary Foster for Wanda Stewart's team Mary Mudryk Remainder of TS&OS under Gary Foster and NSJ (Rusty Patrick & Lem Moore teams)

      As you work throughout the year, please get to know your RDM and keep them in informed about your assignment. When you are scheduled to roll-off a project or assignment, the RDM is required to work with you 45 days before your assignment ends to help ensure you are assigned a new project. Your RDM and manager want to help you find you next engagement, so they must know details on when assignments are ending or renewing before it gets to that date. At a minimum, please let your RDM and manager know immediately if you are required to roll off early for any reason as well as if you are being extended on a project. This helps everyone work together at least 2 weeks before an assignment changes to ensure everyone has a project or assignment to move to.

      We will also be working with project managers and project executives across the sector to ensure they are aware of these business metrics and can help positively impact our results.

      Referrals: Public Sector still has a significant number of open positions to fill. If you have colleagues with strong consulting and technology skills, please refer them to IBM through the IBM Employee Referral Bonus and get a $5000 bonus for helping to bring them on board! See the note from Shelley Smith sent on February 14th for more information..

      2008: I’m absolutely excited about the opportunities we have in 2008. We have some key large deals in the pipeline and a number of contracts performing extremely well which will no doubt lead to add-on signings for these contracts. We're only going to win these deals and delight our clients through the efforts of each and every one of you as you help lead AIS to an outstanding 2008.

      Thanks for your help and commitment as we continue to drive up our utilization, headcount, signings, revenue and profitability.

      Brian Helmey, AIS Practice Leader and Partner, IBM Global Business Services, helmey@us.ibm.com " -SameOldSong-

    • Comment 2/23/08: Is anyone following this interesting story about Dave Steward, who was fired for posting a Dilbert comic strip? In a nutshell … The Catfish Bend Casino, the company Dave worked for, announced pending layoffs. Dave posted the comic. Management caught him posting the comic on a surveillance camera and fired him. Dave tried to collect unemployment benefits and the Catfish Bend Casino blocked him. Scott Adams has come to Dave’s defense by making this case the theme of his recent comics, and various news agencies are having a field day with the story. Here are a few sites. I especially like the personal injury lawyer’s site. It’s hilarious and he says Dave’s bosses make a wonderful case for unionized labor.
    • Comment 2/23/08: Oooops! … Sorry for the tease ... This is the personal injury lawyer's site that comments on Dave Steward’s firing for posting a Dilbert comic. Desmoines.Injuryboard.com-article -Fired for posting a Dilbert comic?!?!-
    • Comment 2/25/08: I'd just like to tell all of you IBM'ers still stuck, there IS LIFE AFTER IBM. I took my retirement and at the same time was let go in January. I worked for a 1st line mgr. who had only been a mgr. for 6 months when she decided she'd rather hire her former co-worker so she basically said I was not doing a good job and let me go with only one 3 PBC rating.

      I have been gone for a month now and have never been happier. There are actually companies outside of IBM who treat their employees with respect. Granted the money isn't as good as I was getting paid but the peace of mind and happiness outweighs the treatment I was getting at IBM. So my advice to everyone that has their 30 years and collect their pension is to get your resume up to date, find a job and stick it to IBM. Why go through the best years of your life going to a job where you are being treated so bad and are miserable?

      Maybe if enough highly skilled people leave they will realize that cutting pay and outsourcing isn't such a great idea. Also, another tip, if you do get resourced, you can report your manager to Corporate HR and still keep your severance package. Just make sure to write on the letter you are not filing an appeal or open door. -No More Big Blue-

    • Comment 2/26/08: To SameOldSong re the Helmey email:"A minimum 44 hour work week is standard across most industries, particularly the Consulting Services and IT Industry." The difference, Mr. Helmey, is that other employers in the IT industry enjoy the loyalty and dedication of their employees, due to years of mutual respect, reward according to performance, competitive pay, etc., etc. IBM no longer has the luxury of a dedicated workforce. They have the worker bees they created. People work overtime willingly when the feel they are a VALUED part of a team, not a 'resource'. My advice to Mr. Helmey, if your ot rate has declined from 110% to 107% (GASP!) Perhaps you should fire some overhead bean counters, rather than loading up (AGAIN) on the backs of the people actually making money in this company. -marbles-
    • Comment 2/26/08: I was surprised at the surge in IBM stock price today, then I saw why - another $16 billion in stock buy back approved - expected to raise EPS by another 5 cents per share. So - 33 Billion spent in 2 years - an average of nearly $100,000 per employee worldwide. When I find out my bonus, sure won't be near this amount, yet it will once again be the story "no money to hand out". -bonus?-
    • Comment 2/26/08: The Helmey memo is a legal smoking gun. Why do you think IBM settled the OT lawsuit. It was some moron exec wrote a memo like that. If Helmey is at IBM in 6 months, I'd be surprised. He may have just cost IBM another $60 million in overtime settlement pay. -RA'd bear-
    • Comment 2/27/08: Anyone notice the eTotals site has been down for almost 2 days. I find it odd that it went down on Monday when managers have to approve the previous weeks OT. Also I find it odd that the site isn't back up yet. When in the life of IBM has management ever allowed a server or application to be down this long. Coincidence? I think not. If it stays down this week - we will not get our OT paychecks from last week and cant submit for this weeks. I find it even more coincidental that it happened at a time where HR is having all these interviews. Never surprised by IBM - watch out folks.. this is step 1 in "OT not getting approved". -eTotals - downtime-
    • Comment 2/27/08: Yes, I did the math too, and the total amount of share buybacks equals roughly 100.000,-- $ per employee. As said below. Some analysts say, this money is spent by clueless executives, who don't know how to drive this corporation. Also keep in mind, IBM spent quite big $$ purchasing other companies. The facts show the results of no promotions, no pay raises, "market based adjustments". Just wondering when and if ever, the negative sentiments of a betrayed work force will show up in the balance sheet. -Squeezed-
    • Comment 2/27/08: When the market won't buy your stock, you buy your own back.... IBM a sub prime company and former American Company. How long can IBM keep faking it? If IBM is so hot a stock, why is IBM always buying its own stock? To feather executive beds and attempt to fake the market into THINKING IBM is a hot stock, when it is NOT.. that's all. -SubPrimeIBM-
    • Comment 2/27/08: An interesting comment on the Helmey memo: Did he sign the BCG that alleged I've been told is signed by all employees in Public Sector? "When staffed on a contract that is capped at 40 hours per week and you are not working more than 40 hours, then you should charge 40 hours to the contract and a minimum of 4 hours to other activities such as Bid & Proposal work, Internal Projects, and/or authorized Education." This tells me that he is encouraging Public Sector employees to break the BCG guidelines and illegally post hours not worked, an especially egregious violation if it's an hourly SOW or PCR. -GAO GUY-
    • Comment 2/27/08: I wonder if eTotals has been down for two days because people are now 15% less motivated to fix anything? -IBM Slave-
    • Comment 2/27/08: The last of the stock options granted by King Little Louie Gerstner fully vests in 2009. So accelerating stock buybacks by IBM which dumbs down he real EPS will continue in the hope it significantly raises the stock price which makes the pot of gold in options for the executives that much more attractive. So the executives that got options that come due by next year are doing all they can to keep the windfall going so they can collect all the booty. You would be shocked to find out the real, true EPS if IBM never did billions and billions of it's own operating capital on buybacks. It would surely not thrill Wall St. that's for sure. Ask Jim Cramer. He'll give you the real booya on it. That's one reason Sam is in his"Hall of Shame"! -optioneer-
    • Comment 2/28/08: Federal Reserve chair Ben Bernanke said yesterday Congress should focus on helping workers who have lost their jobs because of trade, rather than closing U.S. markets to imports. Now that's a sound economic plan! Keep pillaging and promise a half hearted aid to the unemployed. Folks, these bastards must be removed from power and charged with high treason. I would begin with nationalizing the Federal Reserve. A private organization has no business running (to the ground) the finances of the United States. -Socrates-
  • Pension Comments page
    • Comment 2/27/08: Retirement Comparison Modeler discontinued - March 31, 2008 The Retirement Comparison Modeler — the tool currently used to model retirement benefits and compare results of the PCF and PPA plans and the new 401(k) Plus Plan — will be available until March 31, 2008. It will be discontinued after that date. -SameOldSong-
    • Comment 2/28/08: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = 3%; Prior Yr Bonus = 5.75%; Message = New Manager, Probably was not happy when I used to refuse to work after typical 40% OT. And this year we were supposed to have a bigger basket for distribution. Wondering why I did not get the same % like last year if not more, for same rating and approx same % OT -Anon-
  • Raise and Salary Comments
    • Comment 2/22/08: I just want to point out that this wage cut means much more than what most people have posted here. Someone ran the numbers for a person making $60k/yr that is taking a $9k/ cut, and then projected the numbers across the 7,500 employees affected. My friends you\'re losing much more than the just the $9k in this example. .A $9k/yr pay cut in this example also means benefit cuts that are base on your yearly wage.

      Social security losses are one example. The employee contributes about 7.5% of his pay and the employer makes a matching contribution and so you lose an est. additional $750 in FICA contributions (when your pay is cut by $9k/yr ( you\'re losing the employer match contribution) That means less money in your retirement years too.

      Your vacation pay...holiday pay.....and what if, God forbid, you ever need to claim disability benefits... overtime is not factored into those benefits now is it ? If you have earned three weeks of vacation per year you better figure on working 47 hours a week not just 46 to make up for those vacation days/weeks.

      If you have a loan or credit card debt. Some of you may have your credit profiles readjusted as your debt to income ratio changes...you\'ll have a lower credit score... and that may increase the interest that you pay on your credit cards pushing you further into the hole.. Many people fail to see this relationship here as it is not necessarily immediate and your severance package.

      We're about seven months away from the next round of H1-b students graduating. These foreign students are another opportunity for the company to cut cost again, Should you get hit with a layoff, your severance package will most likely be based upon base wags not overtime pay. Not to mention that effects to your local committees due to the loss revenue. Yes my friends, some people call it the trickle down economics effect.....but ..I call it piss on the people economics ! -oz-

    • Comment 2/22/08: Salary = 75K pre-cut; Band Level = 7; Job Title = IT Specialist; Years Service = < 1; Hours/Week = 40; Div Name = 16; Location = DC; Message = -Really Bummed- You bet your ass I'm doing something, as are many others. I just joined IBM last July, and had offers from several very prestigious companies. I chose IBM because of the salary and the name (but mostly the higher salary). They have taken that away, so I'm taking myself away from IBM. There are many people who have commented here as if they are big time victims. This situation is awful, as I know personally, but anyone who stays at this company in light of these changes only has them self to blame if it happens again. You have been warned! I don't understand how so many people who possess high demand IT skills could sound so broken and powerless. You should realize that to have IBM on your resume is an asset, and you need to capitalize on it. It's not that hard!

      I had my first offer three weeks after I learned of the pay cuts (I also started submitting my resume the day I found out about the cuts). When I received my offer letter in July it was an agreement between two bodies. IBM agreed to employ me, provide benefits, and pay me a specified salary in exchange for my effort as a consultant. Since they have decided that they don't need to keep up their end of the bargain, I have decided that I don't need to keep up my end. I have resorted to producing very little output. I spend my entire day finding a new job, and produce the bare minimum, and usually even less than that. I'm leaving, why should I care? I hope a lot more people are doing this.

      I really think bringing this to the attention of the clients is important as well. The most insulting part of all this is that I was never classified correctly from the beginning. I never even wanted to be an IT Specialist. This was a miscommunication with HR when negotiating my position. Not having known better, I said "I don't want to be an IT Specialist, I want to be a consultant". The HR person answered me with: "Oh you will definitely be a consultant, we just call you an IT Specialist as an internal descriptor". I was too happy with the rest of the package to really push the issue, as they said I could change it whenever I want anyway. Boy did I learn my lesson there.

      I don't even do work that resembles my job description, and I know for a fact that my appeal will be rejected. I hope it is. I wouldn't want my disgust with this horrid beast of a company to wane during my last weeks with the company. I have come to the same conclusion that others here have: the fact that IBM would make such a moronic decision as this is clear evidence that the company has completely lost its mind, and is not a place that I would ever want to work.

      I will never work for (or with) IBM again, EVER. I have interviewed with 4 other prominent consulting companies, put my project work to a near halt, notified my project managers that I am leaving in the near future as I negotiate my new salary (which will be a SIGNIFICANT raise from my salary BEFORE it was cut). This was a favor to them (who don't need to be victims), because it gives them the opportunity to find my replacement. I waited until I had finished interviewing before notifying them. I have joined the alliance, but because I have lost faith in IBM, I now know that I would never stay at this company even if they gave me my old salary back. As a result I have not escalated to upper management. I spent that time preparing my resume and submitting it to prominent consulting companies. -Outta Here!-

    • Comment 2/23/08: From the vantage point of a 30+ year IBM'er, it's pretty pathetic to see the total and complete decline of the quality of employment IBM used to offer it's employee's. Unfortunately for me, I do not have the luxury of leaving due to personal circumstances beyond my control (health related reasons), and I don't WANT to raise my hand and voluntarily "retire" either. So when I do leave, I want and need to take six months pay with me. What scares me is this: Maybe I won't get those severance dollars. As far as volunteering for a Resource Action goes, I've thought about it, but I've heard it both ways; some people get RA'd when they volunteer, and some don't. Anyway, while I'm still an "active" employee, (IBM probably thinks I'm "active", but I know better) I'm going to stick it to them seven ways to Sunday, which is something 25 years ago, I could never have brought myself to do. How pathetic is THAT??? How sad. -Anonymous-
    • Comment 2/23/08: Outta Here: "This situation is awful, as I know personally, but anyone who stays at this company in light of these changes only has them self to blame if it happens again. You have been warned! I don't understand how so many people who possess high demand IT skills could sound so broken and powerless. " You've been here less than a year. Some of us had several years sneak up on us, through a combination of:
      1. misplaced optimism ("It can't get worse, can it?")
      2. inertia ("I'd like to make a change. Maybe next week I'll update my resume.")
      3. needing updated skills (Don't ever let yourself be pigeon-holed in a specialty that your employer tells you is "critical", if it's not a specialty in high demand elsewhere too. Because when your employer no longer needs it, your value to them just imploded *and* it's hard to crawl back into a similar position of expertise all over again in a different role.)
      4. just plain being too heads-down busy to do something about it.

      Working for IBM is like being in an abusive relationship. The abuser will try to make you feel that you deserve the abuse, and couldn't possibly find better elsewhere. A good abuser will wear you down and make you actually believe that to some degree. So be grateful you're on your way out. Some of us are less mobile for a variety of reasons, and trying our best to leave. Just takes time. Not as easy for some as for you, you lucky dog you. :-) -Anon-

    • Comment 2/23/08: We have ex-managers in our mfg area in Poughkeepsie that are now band 4 mfg operators. These ex-mgrs DID NOT have money taken away. We hear these ex-managers brag about the money they are making with all their OT and the less responsibility. I hope I can go out to pasture this way. Why would the IT professionals lose 15% and not the ex-mfg mgrs. I hope somebody is looking at this inequity. Look at all the ex-mgrs in Poughkeepsie and East Fishkill. None of them lost money going to non exempt jobs that are much lower bands. -Just not right-
    • Comment 2/23/08: First of all these are pay cuts. The people affected by the pay cuts are guinea pigs. Management has been having meetings because they are losing money with outsourcing now that the dollar has devalued. IBM is unhappy with the FLSA and wants to test and lobby to change the law. At the same time they want to level the pay so it is even globally. This is only the beginning. Strap yourselves in we are headed for a bumpy ride. Pay off as much debt as you can and refinance your mortgages if you need to before they do this to all of us. All of the corporations will be following the IBM lead .-just1waiting-
    • Comment 2/24/08: I heard from an excellent source that manager's in groups other than IT have received instructions from HR to examine and verify the job classifications and families of their employees. Just what we all thought - more and more to follow. -Really Bummed-
    • Comment 2/25/08: It has finally happened in my area of the business. I am a project manager. Most of the people working on my projects received the pay cut. Before the pay cut, specific work would take about 5-6 hours OT a week. Now the people are telling me this same work required another 3 additional hours of OT for maybe 8-9 each week. Of course, not only does this blow my budget for the project, but it is freaking out our managers. Everyone allegedly has pre-approval for 5 hrs OT each week. Now, people are coming right and left for this additional approval. My execs/bill payers are not going to like the blown budget and HR isn't gonna like the OT. But our mgrs can't say no because the work has got to be done. -Anony-
    • Comment 2/26/08: Salary = 103K;pre-cut; Band Level = 8; Job Title = Senior IT Specialist; Years Service = 7; Hours/Week = 50; Message = To Anon3: The employees that are going to be interviewed are those whose managers have appealed the reclassification. Apparently there is some escalation process that managers must follow in order for their employees to be considered for exempt status. I received an e-mail that I will be contacted for an interview... can't WAIT to see what that is all about. -Another victim-
    • Comment 2/26/08: Salary = 83; Band Level = 8; Job Title = Tele Marketing Manager; Years Service = 5; Hours/Week = 40; Div Name = n/a; Location = n/a; Message = No reclassification evident (yet) in Europe. However earnings letter for 2007 from Sam gave promise of 'real' and 'tangible' commission payments for those in sales. Anyone in Bonus Pools have no real direct line of sight as to what they earn. Our team blew their numbers but dependent on what IOT achieved I earned less than 2 years ago in commission payout. With 3 kids under 5 and my wife made redundant due to IBM outsourcing of Xerox Sam's words rang very false indeed. -Newly promoted manager- Alliance Reply: What country do you work in? Our policy and USA labor law prohibits management from spying or pretending to spy on union activities; which includes this web site. We do appreciate your information; however, we can't continue to post your messages if you are in management.
    • Comment 2/27/08: My manager knows nothing about an appeals process. I feel bad for her. She says that HR is not telling mgrs much and mgrs don't know what to share with employees. Then you have execs at these meetings telling employees mgrs can share things. I see some areas where mgrs are sharing everything. Others like mine are not because they think they can't. Is there hope for fairness and consistency? -Anon3-
    • Comment 2/27/08: I work in GPS - ITD and I think that the re-classification was done differently than other orgs. My mgr tells us that the paperwork was done at the job family level. 1st mistake because all of us do not do the same job. I find out that other orgs were done at the individual level. Also, those other orgs are sharing the individual info with the individuals. My GPS mgmt won't share anything. Wonder why my org is being treated this way? -atedat-
    • Comment 2/27/08: eTotals down for two days. Guess they did not plan for the handling of the extra 7600 at one time. -Anon-
    • Comment 2/28/08: Band Level = 7; Years Service = <1; Hours/Week = 40; Location = DC; Message = Dear IBM, I just wanted to say thanks for giving me the opportunity to quit, and find a much better job! I joined your company out of school last July, and I was very excited to work here. Now I am leaving since you cut my pay, and I am getting a $15K raise (from my pre-cut salary). I should add that I never would have even gone out to look for a new job if IBM hadn\'t given me the shaft by cutting my pay. So, thank you IBM!

      Thank you for such a wonderful growth opportunity, and thank you for letting me know just how shameful and cold hearted your company is... Not to mention how stupid your managers are! I mean, what are you thinking? Do you really think you can cut employee paychecks and expect them to stay?

      If your plan was to drive away your most talented employees, then give yourself a pat on the back! Rest assured that most of the employees who stay with your company will be the bottom of the barrel: either they will be committed for pension reasons (one of the few reasons I can sympathize with), or they will be those employees who are too lazy, unskilled or apathetic to find something new. Either way, you can rest assured that your obvious goal of never getting anything done will be attained with the utmost efficiency.

      Congrats! Since I am going to one of Fortune's "100 best places to work", I feel confident that my new managers would never do something as degrading and moronic as cut pay for highly skilled IT workers. Again, I thank you for being so short-sighted, disloyal, and callous. Your inept managerial staff has opened some incredible doors for me! Sincerely, -Outta Here!-

    • Comment 2/28/08: Salary = 56630.40; Band Level = 6; Job Title = Consultant; Years Service = 4; Hours/Week = 40; Div Name = 5; Location = Chicago Message = meh -John Lee
    • Comment 2/29/08: I'm hoping for some help from others who use this blog. I am requesting an "appeal" and have not been getting information from my management team. Can someone tell me what I need to do to prepare? I\'ve seen some forms posted and have looked at them, but they seem incomplete as far as explaining my "real" job responsibilities. Any comments/help/direction is really appreciated. -Still Mad and Getting Madder-
  • PBC Comments
    • Comment 2/22/08: Prior Yr PBC = 2; This Yr PBC = 3; This Yr Bonus = 0; Prior Yr Bonus = 2000; Message = I did my PBC, I met my PBC - manager says I met all my deliverables on time, but I needed help as I was new. Well, got a 3, so need improvement, show leadership ? He gave me a stretch assignment evaluated me on stretch assignment - but stretch assignment was never on my PBC and what was on my PBC, I met and delivered - what am I missing ? What do I do for 2008 ? Already contacted HR - manager says he is helping me find a new job in his dept. - freaking as I bought a condo 6 months ago and angry - this is all a scam. -R-
    • Comment 2/25/08: Prior Yr PBC = NA; This Yr PBC = NA; This Yr Bonus = 5720; Prior Yr Bonus = 6840; Message = Just to provide a frame of reference. I left IBM in Oct 06. My first year with my new company, I earned $6,840 in bonuses. My salary plan calls for 4 quarterly bonuses of $1040 each, and an annual bonus of $1580. Our organization overachieved in 2007, and we were compensated for it. PS: When I left IBM, I realized a 6% raise in base pay at my new job (Doesn't count bonus), and I have not been called one time off hours. My last two bonuses at IBM were $2300, and $2100 (as a first line manager).. -Anonymous-
    • Comment 2/26/08: Prior Yr PBC = 2+; This Yr PBC = 1; This Yr Bonus = 8.6%; Prior Yr Bonus = 5.8%; Message = Just wondering, being rated a 1 this year, I thought the payouts for 1 were between 9-12%. Receiving 8.6% (no complaints, feel fortunate), anyone know why it was under the 9% threshold? Also, any others willing to state the percentage they received for their rating? Management just states "that is what the payout came to"....hmmm -Anonymous-
    • Comment 2/26/08: Payouts on the High End was 9-12% for a 1. They never did quantify (that I have seen) how well we did, just stating we did sign. better than last year. I heard 7-8ish for a 1. I am curious what the full % range the manager tool called for 1. -Anon-
    • Comment 2/26/08: anon 1 : The 9-12 is a range that the manager uses as a guide. The manager gets a budget so in order to spread the money around to the others he skims the ranges. Plus he also gives back some money to the 2nd line so they can spread it to the other managers. So maybe a few 2 employees got theirs. -big blue-
    • Comment 2/26/08: Prior Yr PBC = 1; This Yr PBC = 1; This Yr Bonus = 8%; Prior Yr Bonus = 7%; Message = Yet again the annual bonus pool is grossly underfunded and first line managers are left to explain how top performers cannot be paid at the top of the 0-12% range. What a negative incentive this has become. -BOHICA-
    • Comment 2/26/08: Prior Yr PBC = 2; This Yr PBC = 3; This Yr Bonus = nada; Prior Yr Bonus = $700; Message = Things are really going down the hill at this place. More productive hours worked in 07 and a lower rating. I figure it is just a way for the company to save some money. It sure is hard getting out of bed in the morning knowing your efforts are meaningless and worthless to those who should care. I'm outta here ASAP, -Not Happy-
    • Comment 2/26/08: Prior Yr PBC = 2+; This Yr PBC = 1; This Yr Bonus = 7.66%; Prior Yr Bonus = 4%; Message = Happy to get it, was hoping for 8% -Anon-
    • Comment 2/27/08: Prior Yr PBC = na; This Yr PBC = 1; This Yr Bonus = 7%; Prior Yr Bonus = na; Message = The manager's tool recommended 7.6 - 10% for a PBC 1. My bonus was pushed down because there wasn't enough money to go around. Pretty lame excuse for punishing a top performer -Still Wondering-
    • Comment 2/27/08: Why am I not surprised IBM screwed the payout for PBC "1"'s? If the bonus payout for a RECORD PROFIT year was significantly increased then why the low end or even below the 9-12% for PBC "1"'s as advertised for this first GDP which replaced our variable pay program? There just wasn't enough put in the pool for managers to allocation so they had to skew it for the PBC 2+'s and PBC "2"'s to get something "respectable" to reflect a RECORD PROFIT RESULTS year by IBM. See my 3/6/2008 and comment. I wasn't that far off now was I? -GDP?-
    • Comment 2/27/08: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = 6.2%; Prior Yr Bonus = 4.4%; Message = Prefer a pay raise to this GDP stuff. IBM owes us more after 2007 results and years of weak prior payouts. -RecordProfits2007-
    • Comment 2/28/08: Prior Yr PBC = 2; This Yr PBC = 2+; Message = As far as I'm concerned the PBC system is useless. Last year all we heard was "we don't have the money" from mgmt. IBM had a great year last year, and even Sam said employees would benefit from the success. So, I was elated when my mgr told me I got a 2+. With all the positive news, I thought I would surely get $1k more than last year. But I found out today that my higher rating, IBM's great year, and Sam's email amounted to only $300 more than last year. Whoo-hoo! Good to know IBM thinks so highly of my efforts. If I see Sam this year, I'll give him my $300 as it appears he needs the money more. -Anon-
    • Comment 2/28/08: Prior Yr PBC = 2; This Yr PBC = 2+; This Yr Bonus = 3.5%; Prior Yr Bonus = 2.5%; Message = Pitiful. I work on average 36% to 42% a week OT, with many, many weeks of 50%+...only one person in our group ever gets a 1. I've gone years without a raise, because I am at or past the midpoint and when I do get one it is 2%. If I have a month with maybe 20% OT, because of vacation for instance, my manager calls and wants to know why I don't have more OT. I am stressed beyond belief and just plain exhausted. -SickOfIt-
    • Comment 2/28/08: Prior Yr PBC = 2; This Yr PBC = 2; This Yr Bonus = 1700; Prior Yr Bonus = 2400; Message = OK - who got my bonus? I thought we had a good year last year. I'm sure it wasn't retaliation for the disagreement we had over his PBC comments. Retaliation is not tolerated at IBM.. -IBMAustin-
    • Comment 2/29/08: Prior Yr PBC = N/A; This Yr PBC = N/A; This Yr Bonus = N/A; Prior Yr Bonus = N/A; Message = My name says it all. Think about it: In order to achieve a 1 in your pbc, you must work at least 50+ hours. But you get your measly 10% bonus at most. But you are working at 125% capacity. Shouldn't you be at least deserving of 25% bonus. Not to mention the 10 hours over is considered overtime, making your bonus even more. Basically, if you get two jobs you will make more than your pitiful bonus you get. So for all those 1's out there.... just look at my name .... I work 40 hours a week and not a single minute more.. -SmarterThanYou-
    • Comment 3/01/08: Prior Yr PBC = 3; This Yr PBC = 2; This Yr Bonus = 0%; Prior Yr Bonus = 3% Message = Put in a lot of OT to get my PBC rating upgraded. Manager in another department offered my a job. I took it. -Anonymous-
  • International Comments
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.

  • "bonuses" by "long2begone". Full excerpt: Band level: 9; PBC rating: 2+; Practice: PSector; Bonus: 6.9%
  • "7.6%" by "426_227". Full excerpt: Band level: 8; PBC rating: 1; Practice: AIS; Bonus: . 7.6%
  • "Bonus" by "bluebie". Full excerpt: Band: 8; PBC: 2+; Sector: ISC BTO; Bonus: 4.1%
  • "Bonus" by "Subwoofer". Full excerpt: Band: 8 PBC: 2+; Sector: FSS - SCM; Bonus = 4%
  • "bonus" by "Darwin's Radio". Full excerpt: Band: 7; PBC: 2; Bonus: 4.1%
  • "Happy and doing well, but what next?" by "young_ex-ibmer". Full excerpt: My background story: This sounds all too common, but here it goes... I was a college grad not thinking too hard about my future. I accepted the IBM job offer simply because I wanted to start working as soon as possible, and they obviously just wanted to stuff their projects with warm bodies without really caring about the enthusiasm or motivation of the applicants. So into the blue pig I go. 18 months later, I'm utterly miserable, despite getting paid for being a dead weight. I constantly wondered if there was more to life than creating BS kind of deliverables to increasingly unhappy clients. Everybody around me is as miserable or even more miserable than I am. Morale has hit rock-bottom and started digging.

    Then a kind and more senior colleague that was about to leave Big Blue tells me to seek my fortune elsewhere and to look up Vault. I read the threads and felt more despondent about my job than ever, but a seed of hope gets planted. I finally work out the basic maths that being a contractor = doing pretty much the same work with less hours and more pay. I leave the blue pig and predictably, my work-life balance, bank balance and mental+physical health improves by leaps and bounds.

    So a big thanks to Dose, civilliberty, ancientblueconsultant and all the posters here for giving me the courage to take that second chance to salvage my career! :)

    I'm currently working as a contract coder in the custom application development space(mostly Java platforms) and for now, I'm quite happy about the way things are. I'm living life as a carefree twenty-something with time for a social life as well as the money to put away towards travelling and investing (instead of working late nights and weekends unpaid while watching my face and waistline prematurely age).

    However, I don't want to end up stuck in a rut again by not making plans for the future. I was appalled by how many band 7s and 8s in Big Blue were so miserable but felt like they had no way out. I don't want to end up with outdated skills or a hopeless mind set like that, so I'm constantly looking to educate myself and upgrade my skills.

    I've been working for my current client for about a year now and have become something of a go-to guy(to my surprise, hard work gets rewarded here, unlike at Big Blue), and they have started to occasionally let me take on more roles in smaller projects due to staff shortage and because they've grown to trust me and see me as a valuable asset they want to retain. Some of these roles included being a stand-in systems analyst while one of their analysts was away for a a long holiday and as a test team lead for a small upgrade project. It's just ridiculous that I got more rotation and variety in roles whilst working as a contractor than within the farcical grad program run by the blue pig.

    Anyhow, can you give me any further career advancement advice? Should I move out of the customs application development space? Learn SAP? Siebel? Tibco? Enroll in a business degree?

    I lean more towards the technical side of things and older contractors that I've met tell me that as long as I can rub 2 brain cells together, there should never be a shortage of contract work for techy people like me, but I don't want take that for granted. And I guess, I'm starting to get sick of doing the same thing and I'm looking to try something else(hopefully that something else will be a role that's harder to export to offshore teams). I'm not 100% sure if I would fancy being a project manager or being a true strategy consultant though. Looking forward to your thoughts!

  • "Outsourcing and off-shoring is not likely to go away" by "civilliberty". Full excerpt: At least not in the foreseeable future. I think it will take a big event before (if ever) corporations return to using the local civilian population - perhaps CEO's will have too be sacked for woeful IT performance, which can be unequivocally related to off-shoring, before that happens. Despite the advice others have given you about tech-work always being available, the trend is to off-shore this more and more in a mistaken belief that the work effort can be easily partitioned and managed at a certain level of quality using remote resources - the truth is much less than ideal. Due to off-shoring, contract rates (at least in Australia) have stagnated somewhat, and in some areas are actually reducing. There are 2 reasons - and abundance of people from a certain part of the world gaining easy access to OZ's labor market, and more often than not lying through their teeth about their skill sets. The other of course is due to off-shoring.

    For your own sake, develop an interest in the business side of IT, so that you can demonstrate to potential employers that you have business acumen coupled with technical ability. This is still viewed favourabley by many employers. I'm not sure ultimately where the ERP market is heading, but a US survey says that many business's see this as strategic (and quite rightly so since it is often a core enabler for enterprise these days)and one they are investing in more.

    I'm hoping and expecting that as the failed off-shoring and out-sourcing efforts get more media attention fewer organisations will be prepared to take the risks - whether this represents a substantial turning of the tide remains to be seen though.

    If you have a flair for management (with the interest that goes with it), then you may want to position yourself to take that path - I think there will always be a need for string management, regardless of outsourcing or off-shoring - it's a question of whether this is your field of interest (apart from occasional team lead activities I don't engage much in it).

  • "Tough Path" by "pork". Full excerpt: Being a coding contractor is great in your 20s for all the reasons you mention. As you get older you may want to reduce your travel, limit the cost of health care, get some stock options or 401k match, all the things you don't get as a contractor. You also may become more interested the business side of things. The transition from IC back to industry is a very difficult one. As an IC you don't manage any resources or budgets. 2 critical factors to management ranks. Enjoy the freedom and financial rewards now but start building a bridge back to industry. Even if you don't cross that bridge for 10 years. See if these clients need additional resources, if so try and source them and have them contract under you. Now you are managing resources and finances. See if you can find work outside your current client and then find the resource to do it. Who knows you may build a nice stable of talent and not have to ever go back to industry again.
  • "Make sure to save 30%" by "bluedngone". Full excerpt: As an independent contractor, be careful with your finances and save at least 30% of our gross after taxes. You will hit a few dry spells! Periodically companies will present you with a full time offer. Depending on the job and the market, it might be the right thing to do. The thing that makes one take a straight job more often than not is family.
  • "Interesting read on corporate psychopaths" by "civilliberty". Full excerpt: Link: http://www.abc.net.au/rn/talks/bbing/stories/s1158704.htm Excerpt: Robert Hare: Well I suppose some people would argue that the very nature of the corporate culture almost compels psychopathic behaviour. There was this documentary that was just completed about seven or eight months ago, a Canadian one called The Corporation, and the premise of the whole thing is that corporations are, by their nature, psychopathic. Could they be impulsive? “Yes.” And could it lack empathy? And I’d explain: “Well, yes, under certain circumstances. If you look at the corporation as an entity, as a person.” And that was taken as evidence that the corporation is, by definition, psychopathic. And I would argue that corporations of that sort are prime targets for a psychopath, because he or she will function very well in a corporate culture that is designed to manipulate, con, lie, steal and cheat. But most corporations aren’t like that.
  • "Agree" by "Frank_Reality". Full excerpt: They're the new robber barons. But comparing the ruling class of IBM to psychopaths is an cruel insult to the psychopaths.
  • "We need Teddy back" by "Frank Cary". Full excerpt: I was just thinking this morning that our political climate resembles the America that existed when McKinley took office. Today's corporations with their lackey politicians and bought-paid-for judges have succeeded in rolling back the formal and informal protections for the rest of us that got started when Teddy Roosevelt unexpectedly took over.

    When I see news stories like Sam buying W's summer home in Maine, I know the Illuminati or some bunch very much like them is running the country.

  • "Yes" by "ancientblueconsultant". Full excerpt: Read The Corporation by Joel Bakan. It's a great treatise on the pathological pursuit of profit and power.

    We are in a cycle, very similar to the late 1890's and mid 1920's, were CEOs were rock stars, had unfettered power and the pursuit of material gains was endemically popular with most Americans. The cycle reached its zenith in the 2004 election and the pendulum is moving back. It won't be long when many business schools will use IBM as the shining "bad boy" example of this latest cycle of unbridled greed and avarice fueled by materialism.

    The new generation of Americans is seeing right through the con job. IBM's hiring among young Americans has become a problem. Sales job postings going begging even with promises of unlimited commission go unfilled now because today's youth don't want to experience the materialism and broken pension and medical promises given to their parents generation. That's one of the reasons for the move over seas. Not enough brand blinded materialistic and greedy young to be fooled anymore in this country.

  • "Job Offer" by "eng909". Full excerpt: Hi guys I need some perspective. I joined IBM straight out from school as a technical resource 2.5 years ago. I was one of the lucky few whose career progression went fairly well here. I was promoted to band 7 in 18 months, and at this point I have already transitioned to a architect role in charge of 10 developers. I have just sold a large piece of work to the client and believes band 8 is on the menu for next year.

    I have just been offered a software engineer/individual contributor role at google. Although there is a degree of prestige there, it is a step back from my current role in terms of responsibility. Any insights that you guys can provide will be greatly appreciated.

  • "You're already behind" by "ancientblueconsultant". Full excerpt Managing 10 people and a Band 7? Two to three years ago that would have been a Band 9 job. 18 months for a fast track is too slow to move up a band. Things must be slowing down.

    In any case, the question is what do you want to do? Stating that being an individual contributor is a "step back" means you've drunk the kool-aid for management and you are on track to get out of the technical part of the business. Nothing wrong with that, but you should realize that you transitioned into management, not IT Architecture. Don't delude yourself into thinking you can be a techie and a manager at the same time, especially in a company like IBM. You have 2 sets of choices. Stay in IBM for a long time or not. Stay in management or not.

    If you are a techie at heart and want to have an impressive resume, then I can't understand why you haven't moved to Google already. Having Google in your resume is like having Microsoft 10-15 years ago. You are leading edge.

    If you are looking at a management career, then the key is having been successful in more than one culture. You have been successful at a large behemoth such as IBM and if you go to Google, get a supervisory position, then you can show the ability to excel and grow into management no matter what the corporate environment: large and process oriented (IBM) or fast growing and entrepreneurial (Google).

    The longer you stay at IBM, the longer you risk being labelled a "lifer" IBMer, which is very "resume dangerous". Just to avoid this career issue, I'd just go to Google then you can come back (if you still think it's the right thing after being exposed and having your head reshaped by Google and the California Silicon Valley mentality) and get a higher position at IBM quicker than if you stayed and languished doing PBC's as a manager.

    So the answer? What are you waiting for? I'm just stunned your asking for advice!

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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