Dell: Show me the stock options
Published: 30 May 2002 07:31 BST
When given the choice between discounted stock options or a cash bonus, Dell chief executive Michael Dell took the stock.
In a Securities and Exchange Commission filing, the company said its chief executive got a raise, but that his bonus fell from a year ago. However, Dell, along with other top executives, got healthy stock option grants.
For fiscal 2002, which ended 1 February, Dell's salary came to $925,962, with a bonus of $347,236. In 2001, Dell's salary was $892,308, with a bonus of $1.67m.
Dell's salary "remains below the median base salary earnings for chief executive officers of the peer group of companies," the company's compensation committee said in the proxy filing.
The company said its chief executive got a smaller bonus because the company's revenue growth fell short of "aggressive internal goals." The chief executive could have received another cash payment tied to the company's increased unit shipments, but he "elected to forego this bonus in lieu of a discounted stock option grant," the company said.
Under the company's executive stock plan, stock options were granted 23 March to key executives, giving them the choice to forego all or some of their bonus to get discounted options with a two-year vesting schedule.
The chief executive's decision to forego a portion of his annual bonus for stock options netted him an additional 307,285 shares in March. He was granted one million stock options in 2001. Dell's chief executive already owns 11.8 percent of the shares outstanding as of 30 April. The stock options' strike prices, the prices at which the stock could be later sold, range from $21.72 to $24.09.
It was a similar story for other top Dell executives.
Dell chief operating officer Kevin Rollins had a fiscal 2002 salary of $721,154, up from $688,462 in 2001. Rollins' 2002 bonus was $243,389, down from $1.15m in 2001. Rollins was granted nearly 5.4 million stock options in 2001, the largest sum of any of the top executives.
The salary of James Vanderslice, Dell's vice chairman, was up from a year ago, but he received a lower bonus. Vanderslice and Rollins, like Dell's chief executive, decided to give up a portion of their bonuses to take the stock options.
Paul Bell, senior vice president of Europe, Middle East and Africa; and Joseph Marengi, senior vice president of the Americas, also got raises, but had their bonuses cut. Bell also skipped some of his bonus for stock options.
Dell will hold its annual meeting on 18 July.
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