IBM 2016 Annual Meeting of Stockholders
IBM's 2016 Annual Meeting of Stockholders was held on Tuesday, April 26, 2016 at 10 a.m. in the Savannah International Trade & Convention Center, One International Drive, Hutchinson Island, Savannah, Georgia.
International Business Machines Corporation (IBM) held its Annual Meeting of Stockholders on April 26, 2016. Below are the final voting results. For more information on the following proposals, see IBM’s proxy statement dated March 7, 2016.
|The stockholders elected each of the fourteen nominees to the Board of Directors for a one-year term by a majority of the votes cast.|
|The stockholders ratified the appointment of PricewaterhouseCoopers LLP as the Independent Registered Public Accounting Firm for the company:|
|Advisory Vote on Executive Compensation:|
|Three stockholder proposals were presented at the meeting.|
|Stockholder Proposal for Disclosure of Lobbying Policies and Practices:|
|Stockholder Proposal on the Right to Act by Written Consent:|
|Stockholder Proposal to Have an Independent Board Chairman:|
Chairman, President and Chief Executive Officer
2016 IBM Annual Meeting of Stockholders
April 26, 2016
I will now provide a report on your company.
I will describe:
I. The progress of our transformation
IBM is the only company in our industry that has reinvented itself through multiple technology eras and economic cycles. We do so for one reason: to create differentiating value for our clients and for you, our owners.
As we meet here today, we are doing so again, in an IT industry that is fundamentally re-ordering at an unprecedented pace. In response, IBM is becoming much more than a “hardware, software, services” company. We are emerging as a cognitive solutions and cloud platform company.
It’s worth recalling our journey to this moment:
Now, in 2016, we have reached a new stage in our transformation. As important as “becoming digital” is to our clients, it has become clear that it is not the destination. Rather, digital business is converging with a new kind of digital intelligence — what you will recognize as Watson. We call this Cognitive Business.
In October we launched a global conversation about this new era of business and technology. Let me describe what it means.
II. The Dawn of the Cognitive Era
Eighty percent of the world’s data is “unstructured.” This is everything we encode in language, plus all digital video, audio and images. Think of this as “dark” data, because it has been essentially invisible to computers. They can capture, store and process it, but they cannot understand what it means.
But cognitive systems can. They can ingest it all; they can understand its meaning, through sensing and interaction; they can reason about it, generating hypotheses, arguments and recommendations; and unlike any previous computing system, they learn — from training by experts and from their own experience. In fact, they never stop learning.
By “cognitive” we mean something much broader than what some call “artificial intelligence.” And it opens up a vast new opportunity space for IBM. The existing IT market is sized at $1.2 trillion. We estimate that the market for making better, timelier business decisions — opening because of cognitive — could be double that by 2025. That’s an additional opportunity space of more than $2 trillion.
And the good news is: IBM is #1 in cognitive computing. We have clients in 45 countries. We are continuing to expand our Watson ecosystem and reach. Over the last 12 months, the number of developers using Watson digital services — known as application programming interfaces, or APIs — is up by more than 300 percent, and the number of large enterprises we’ve engaged with has doubled. More than 1,000 researchers are working on cognitive projects.
What started as one Watson unit is now a growing family: the core Watson team, as well as individual Watson businesses aimed at particular industries or professional domains, such as Watson Health and Watson Internet of Things.
Importantly, each lives on the IBM Cloud. In a world being rewritten in code, coders are the new builders, and cloud is the platform on which they are building. All of our Watson solutions, along with the rest of our growing portfolio of cognitive solutions, are being built on a cloud platform.
Let me pause for a moment on the word “platform.” It’s important. A cloud platform is much more than a faster and cheaper way to access IT. It’s a whole new model of innovation, manufacturing and distribution. Cloud platforms provide an open environment for collaboration and rapid scaling. They expose growing libraries of APIs from which partners and third parties across a broad ecosystem can create new, innovative solutions. And cloud offers access to multiple data sets and relevant expertise — not only about technology, but from business and societal domains.
And because Watson is a platform, not a product, we can literally build cognition into everything digital. Through cognitive solutions on cloud platforms, every digital application, product and process can understand, reason and learn.
III. Creating superior value for clients, investors and the world
We are entering a new era in technology, business and society — and only IBM is positioned to lead it. A historic moment like this is exactly when IBM’s unique character and capabilities come into their own. We know what is required to remain a leader in era after era. We know what enterprise transformation requires. And we also know that even as we re-invent IBM, we must never forget what endures.
IBM touches billions of lives every day. Our core systems run 90 percent of the top 60 banks and 80 percent of airline reservations. Seventy percent of the world’s business data is managed by our mainframes.
We remain the world’s most innovative company. For the 23rd straight year, in 2015 IBM earned the most U.S. patents of any organization. And our innovations matter.
Finally, the work we do changes not only business, but society.
Let me mention just one exciting new citizenship program we launched earlier this month — IBM Health Corps. As part of our broad “moonshot” to change the face of healthcare, we will send teams of IBMers into communities around the world, working to increase access to care.
Importantly, each team will have a notable new member: Watson. It will not only assist Health Corps teams in their individual projects, but will absorb the lessons from each team as it travels to the front lines of global healthcare. Because Watson is a learning system, it will become an ever-smarter repository of knowledge on community health.
So, step back. In total, IBM is becoming a higher-value business, which will continue to return substantial value to you through dividends and gross share repurchases. Last year, these were $5 billion and $4.6 billion, respectively. With today’s announcement of an increase in our quarterly dividend from $1.30 to $1.40 — an increase of 8 percent — we marked our 21st consecutive year of raising our dividend and our 101st year of paying one.
For all these reasons, I hope you share our optimism about your company. And perhaps the clearest evidence of our continuing vitality is the energy, dedication and imagination of our most fundamental asset — the unique professionals known as IBMers.
I wish you could have spent just an hour with one of the more than 8.000 teams that gathered over the past couple of months to brainstorm and build new business and societal applications of Watson. The goal was to accelerate our transformation as a Cognitive Business by engaging IBMers in actually building new cognitive apps: building cognitive enhancements to existing products and services, and building cognitive capabilities into the way we work every day in IBM. Which is why we called it “Cognitive Build.”
This was not just an exercise for coders and developers. More than 70 percent of IBMers, representing 89 countries, participated.
The more than 2,700 ideas they came up with were both imaginative and pragmatic, in areas ranging across sales, healthcare, banking, transportation, security, marketing and supply chain… as well as fashion, sports and movies. And then, since these are IBMers, there were highly aspirational ideas for tackling cancer, autism (12 teams had ideas for helping here) and, literally, world hunger.
Many are already in the process of being built for review at an event next month, and we will be funding hundreds more — as products and services and in our own operations.
So when I say we are becoming a cognitive solutions and cloud platform company, I mean not just our strategy, but our culture and our people.
Let me conclude by saying, quite simply, there is no other company in the world like IBM. I am deeply grateful to the entire IBM team for bringing us to this point, and to you, our shareholders, for your support. I hope you share our excitement about your company’s path and the opportunity we have, together, to fulfill the purpose and the destiny of this great company.
Information about non-GAAP financial measures in report on company
This report includes selected references to certain non-GAAP financial measures that are made to facilitate a comparative view of the company's ongoing operational performance. For information about the company's financial results related to FY 2015 Strategic Imperatives and Cloud revenue growth at constant currency excluding divestitures, FY 2015 Analytics, Mobil, Security and Social revenue growth at constant currency and 1Q 2016 Strategic Imperatives revenue growth at constant currency which are in each case non-GAAP measures, see information included in Attachment I (press release) and Attachment II of the company's Forms 8-K submitted to the SEC on January 19, 2016 and April 18, 2016.
Note: Historical segment information in the 2016 IBM Annual Meeting to Stockholders is presented on pre-2016 segment reporting structure. Historical hardware business profit performance is presented on an as reported basis.