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Employees at Dell, the privately held computing giant, were reminded last month exactly how weak the market for personal computers has been when then they received a memo saying they would be getting only partial payment of their usual annual bonus.
Now the evidence of that weakness is a matter of public record thanks to a filing with the U.S. Securities and Exchange Commission this morning showing that sales at Dell — which is in the process of acquiring storage giant EMC — declined by $3.2 billion in the fiscal year ended Jan. 29 to $54.9 billion, and that it ran an operating loss of $1.1 billion. Dell blamed the drop mostly on a “global decline in demand for desktops and notebooks.” Operating cash flow for the year was $2.2 billion, down from $2.6 billion the prior year.
The Feb. 24 memo informed employees who participate in a program known internally as the Incentive Bonus Plan — roughly a third of the company’s work force — that given that performance they weren’t technically entitled to a bonus payment at all. CEO Michael Dell and the company’s board of directors decided to pay them a bonus amounting to 75 percent of what they would have otherwise expected.
“Although performance versus … targets would have indicated no bonus payout, we’re pleased to recognize your contributions” with a payment amounting to 75 percent of what they would have otherwise earned, the memo disclosed by Re/code last month read.
Even so, the filing shows there are still some hefty bonuses and incentives being paid to those in the senior ranks at Dell.
The biggest of the bunch appears to be for chief integrations officer Rory Read, the former CEO of the chip company Advanced Micro Devices who is leading Dell’s efforts to integrate with EMC. The filing shows that Read made a combined $10.5 million in salary, bonuses — including a $750,000 signing bonus — and stock options worth nearly $7.8 million. Additionally, Read will earn $15 million under a long-term incentive program that vests over five years starting May 15. His annual base salary is $650,000.
He was also one of four Dell executives subject to its Special Incentive Bonus program. The other three are Jeff Clark, president and head of the unit responsible for PC sales; Marius Haas, president and head of the enterprise business; and CFO Tom Sweet. Each was paid about $2 million under this program.
Clarke finished the year with a combined $3.8 million including $2.9 million in bonuses. Sweet and Haas took home about $3.4 million each including bonuses of $2.7 million and $2.6 million respectively.
Finally, Dell execs were subject to the same reduced payment in their regular corporate bonuses — the same ones that were reduced in the memo sent to all employees last month. Under that formula, CEO Michael Dell received a payment of a mere $1.4 million, which amounts to a rounding error given that he was worth more than $19 billion last year. Clarke received nearly $558,000 while Sweet received $536,000, Haas $433,000 and Read $204,000.
A Dell spokesman declined to comment, saying that the filing speaks for itself.
This article originally appeared on Recode.net.
