Bloomberg News

Dell Trims CEO’s Pay 14% as Performance Slips Ahead of Buyout

June 04, 2013

Dell Inc. CEO Michael Dell

Since returning in 2007 to the company he founded, CEO Michael Dell has spent billions on acquisitions designed to make the company less reliant on PCs and expanding its presence in equipment, software and services for corporate data centers. Photographer: Jason Alden/Bloomberg

Dell Inc. (DELL:US) cut Chief Executive Officer Michael Dell’s compensation by almost 14 percent last year after a decline in the company’s financial performance that’s leading to a bid to take it private.

Dell, the founder of the Round Rock, Texas-based computer maker, received total compensation for the fiscal year ended Feb. 1 of $13.9 million, down from the $16.1 million he earned in fiscal 2012, according to a company filing (DELL:US) yesterday. The CEO’s bonus payment of $1.33 million for the latest year was 70 percent of his target, the document said.

The company, which has suffered from slipping sales (DELL:US), profit (DELL:US) and stock price as demand for personal computers wanes, is in the midst of an attempt by CEO Dell and Silver Lake Management LLC to take it private in a $24.4 billion leveraged buyout. In a filing last week, Dell reaffirmed the deteriorating financial condition it first discussed in March that led to the buyout offer, including a personal-computer business that’s projected to shrink by $10 billion over four years.

The board’s compensation committee “considers a variety of factors when evaluating Mr. Dell’s performance, including performance against several key financial metrics and performance against certain non-financial objectives such as progress towards Dell’s strategic transformation,” the filing said.

Last year, the CEO received a salary of $950,000 and stock awards of $11.6 million, in addition to the bonus.

Shareholder Vote

The company plans to hold a special meeting of shareholders July 18 at its headquarters to vote on the buyout, which is being opposed by billionaire financier Carl Icahn.

Since returning in 2007 to the company he founded, CEO Dell has spent billions on acquisitions (DELL:US) designed to make the company less reliant on PCs and expanding its presence in equipment, software and services for corporate data centers. Sales last year declined 8 percent to $56.9 billion, and earnings excluding some items fell 19 percent to $1.72 a share.

Dell rose less than 1 percent to $13.45 yesterday at the New York close. The shares have gained 33 percent this year ahead of the buyout plan, which Bloomberg News first reported in January.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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