Dell Executives to Get Cash Bonuses
AUSTIN (AP) _ Dell Computer Corp., which has been slashing employee stock options, plans to pay cash bonuses to top executives if the company hits profit targets.
The board of directors approved the bonuses last month and will ask shareholders to give their approval to the plan in July, the company said in a regulatory filing Monday.
Board members said the five-year bonus plan would help Dell attract and keep qualified executives and give them more reason to promote Dell’s success. The previous incentive plan, approved in 1998, expires in July.
Dell said the bonuses would be based on hitting targets for net income before extraordinary items. The board’s compensation committee would pick eligible executives each year and set the terms and conditions for payment of bonuses, which could not exceed 0.5 percent of the company’s ``consolidated net income″ _ the same limit on current bonuses.
Dell reported net income last year of $2.12 billion.
Dell officials have said in recent months they would cut the number of stock options granted to employees by about half, said company spokesman Mike Maher.
``Stock options are still a part of compensation for Dell employees,″ Maher said, but he added that the company believes that reducing the reliance on options resulted in more attractive compensation packages.
In the SEC filing, the company said Michael Dell was paid a salary of $950,000 and a $2.5 million bonus last year, compared to a bonus of $347,000 in 2001. President and chief operating officer Kevin B. Rollins was paid a salary of $771,000 and a $2 million bonus in 2002, also a large boost over his 2001 bonus of $243,000.
Each man also received options for 500,000 shares.
In the same filing, Dell said it will ask shareholders to shorten its name to Dell Inc. to reflect its expansion into other areas of the technology business.
The Round Rock-based personal computer maker said its name doesn’t fit anymore because it is also a leading seller of servers, storage systems and other technology goods and services.
Dennis Riney, executive vice president with FutureBrand, a brand-consulting firm, said the name change carries few risks.
``The company is trying to portray itself as going beyond just computers,″ Riney said. ``And since they’ve built such a strong brand name, the word ‘computer’ is almost superfluous anyway.″
The change also would need approval of shareholders, who are scheduled to meet July 18 in Austin.
In afternoon trading Tuesday on the Nasdaq Stock Market, Dell shares rose 4 percent, or $1.15 to $30.65 each.