2002 Was Good Year For Palmisano

IBM's CEO saw his compensation jump 45% over 2001, when he was president and CEO
WASHINGTON (AP) - Samuel J. Palmisano, chief executive of International Business Machines Corp., saw his compensation jump 45 percent in 2002 over the previous year when he was president and chief operating officer.

Palmisano, who became CEO in March 2002 when Louis V. Gerstner Jr. retired, received a base salary of $1.4 million and a bonus of $4.5 million, according to a filing Monday with the Securities and Exchange Commission.

In 2001, Palmisano was paid a base salary of $1.1 million and received a bonus of $3 million.

Gerstner, who gave up his position as chairman in January, earned a base salary of $2 million and a bonus of $1.5 million in 2002, compared with a $2 million salary and a $8 million bonus in 2001, when he was CEO.

In addition, Gerstner made about $4.7 million from exercising options in 2002. At the end of the year, he had about 5.7 million exercisable options. Gerstner didn't receive any additional options in 2002.

Palmisano didn't exercise any options in 2002 but was granted an option to purchase 300,000 shares at an exercise price of $97.59 a share. Assuming a 10 percent annual stock price increase, the option is valued at $46.7 million, according to the filing.