Executive compensation

2015 Outstanding equity awards at fiscal year-end narrative

2015 Outstanding equity awards at fiscal year-end narrative

Option awards (columns (b) - (f))

General terms

Market-priced options:

– From 2005 to 2007, market-priced options were awarded to the named executive officers who participated in the IBM stock investment program (the Buy-First Program) by agreeing to invest 5%, 10% or 15% of their annual incentive program payout in the IBM Stock Fund under the nonqualified deferred compensation plan.

– The exercise price is equal to the average of the high and low prices of IBM common stock on the NYSE on the date of grant.

– These options vested 100% three years after the date of grant.

Premium-priced options:

 

Stock awards (columns (g) - (j))

Number of shares or units of stock that have not vested (column (g))

The amounts in this column are the number of RRSUs that were outstanding as of December 31, 2015.

Market value of shares or units of stock that have not vested (column (h))

The amounts in this column are the value of RRSU awards disclosed in column (g), calculated by multiplying the number of units by the closing price of IBM stock on the last business day of the 2015 fiscal year ($137.62).

Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (column (i))

The amounts in this column are the number of PSUs that were outstanding as of December 31, 2015.

Performance share units

2015 Outstanding PSU award payout levels

 

Name Grant Date Threshold Target Maximum
V.M. Rometty 06/09/2014 17,709 70,834 106,251
  06/08/2015 21,045 84,178 126,267
M.J. Schroeter 06/09/2014 5,139 20,556 30,834
  06/08/2015 7,121 28,482 42,723
M.D. Rhodin 06/09/2014 4,584 18,334 27,501
  06/08/2015 7,121 28,482 42,723
B.A. van Kralingen 06/09/2014 5,417 21,667 32,501
  06/08/2015 7,121 28,482 42,723
J.E. Kelly III 06/09/2014 5,556 22,223 33,335
  06/08/2015 7,912 31,646 47,469

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (Column (j))

The amounts in this column are the values of PSU awards disclosed in column (i), calculated by multiplying the number of units by the closing price of IBM stock on the last business day of the 2015 fiscal year ($137.62).

 

2015 Outstanding equity awards at fiscal year-end table

 

  Option Awards Stock Awards
Name
(a)
Grant Date Number of Securities Underlying Unexercised Options
(#)
Exercisable
(b)
Number of Securities Underlying Unexercised
Options(3)
(#)
Unexercisable
(c)
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
(d)
Option Exercise Price(4)
($)
(e)
Option Expiration Date
(f)
Type of Award Grant
Date
Number
of
Shares
or Units
of Stock That
Have Not Vested(6)
(#)
(g)
Market Value of Shares
or Units
of Stock
That Have Not
Vested (7)
($)
(h)
Type of Award Grant
Date
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested(8)
(#)
(i)
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(7)
($)
(j)
V.M. Rometty                            
  05/08/06 21,456(1) 0 N/A 91.04(5) 05/07/16         PSU 06/09/14 70,834 $9,748,175
                      PSU 06/08/15 84,178 11,584,576
Total   21,456 0           0 $0     155,012 $21,332,751
M.J. Schroeter                            
  05/08/06 213(2) 0 N/A $82.76 05/07/16 RRSU 12/18/12 4,951 $681,357 PSU 06/09/14 20,556 $2,828,917
  05/08/07 678(2) 0 N/A 102.80 05/07/17 RRSU 02/02/15 50,315 6,924,350 PSU 06/08/15 28,482 3,919,693
Total   891 0           55,266 $7,605,707     49,038 $6,748,610
M.D. Rhodin                            
  N/A           RRSU 01/02/13 13,298 $1,830,071 PSU 06/09/14 18,334 $2,523,125
              RRSU  02/02/15  50,315  6,924,350 PSU 06/08/15 28,482 3,919,693
Total   0 0           63,613 $8,754,421     46,816 $6,442,818
B.A. van Kralingen                            
  N/A           RRSU 02/02/15 50,315 $6,924,350 PSU 06/09/14 21,667 $2,981,813
                      PSU 06/08/15 28,482 3,919,693
Total   0 0           50,315 $6,924,350     50,149 $6,901,506
J.E. Kelly III                            
  05/08/06 7,378(2) 0 N/A $82.76 05/07/16  RRSU  12/30/15  55,922  $7,695,986 PSU 06/09/14 22,223 $3,058,329
  05/08/07 6,698(2) 0 N/A 102.80 05/07/17         PSU 06/08/15 31,646 4,355,123
Total   14,076 0           55,922 $7,695,986     53,869 $7,413,452

Type of Award:
PSU = Performance Share Unit
RSU = Restricted Stock Unit
RRSU = Retention Restricted Stock Unit


(1) This option award grant vested 25% per year on the first through the fourth anniversaries of the respective grant dates.

(2) These options were granted under the Buy-First Program. These options vested 100% on the third anniversary of the respective grant dates. See the 2015 Summary Compensation Table Narrative for additional information about this program.

(3) As of December 31, 2015, there were no unexercisable options for the named executive officers.

(4) The exercise prices shown in this column are equal to the average high and low prices of IBM common stock on the New York Stock Exchange (NYSE) on the date of grant, except for premium-priced options.

(5) This grant consists of premium-priced options, which have an exercise price equal to 110% of the average of the high and low prices of IBM common stock on the NYSE on the date of grant.

(6) The amounts shown in column (g) of the 2015 Outstanding Equity Awards at Fiscal Year-End Table are RRSU awards that have not yet vested. See the 2015 Summary Compensation Table Narrative for additional information on these types of awards. The Vesting Schedule for Unvested RRSUs table below shows the vesting schedules for these outstanding awards. Mr. Schroeter’s 2012 award fully vests on December 18, 2017, provided that he is an employee of IBM as of that date; and his 2015 award vests 50% on February 2, 2017 and 50% on February 2, 2019, provided that in each case, he is an employee of IBM as of those dates. Mr. Rhodin’s 2013 award fully vests on January 2, 2018, provided that he is an employee of IBM as of that date; and his 2015 award vests 50% on February 2, 2017 and 50% on February 2, 2019, provided that in each case, he is an employee of IBM as of those dates. Mrs. van Kralingen’s 2015 award vests 50% on February 2, 2017 and 50% on February 2, 2019, provided that in each case, she is an employee of IBM as of those dates. Dr. Kelly’s 2015 award vests 50% on December 30, 2017, 25% on December 30, 2018 and 25% on December 30, 2019, provided that in each case, he is an employee of IBM as of those dates.

(7) Values in these columns are calculated by multiplying the number of units by the closing price of IBM stock on the last business day of the 2015 fiscal year ($137.62).

(8) The amounts shown in column (i) of the 2015 Outstanding Equity Awards at Fiscal Year-End Table are PSU awards that have not yet vested. See the 2015 Summary Compensation Table Narrative for additional information on PSU awards. The Vesting Schedule for Unvested PSUs table below shows the vesting schedules for these outstanding PSU awards (reflecting Target payout), all of which are paid out in February following the end of the performance period.

 

Vesting schedule for unvested RSUs and RRSUs

 

  Vesting Schedule
Name Type of Award Grant Date 2017 2018 2019
V.M. Rometty N/A        
M.J. Schroeter RRSU 12/18/2012 4,951    
RRSU 02/02/2015 25,157   25,158
M.D. Rhodin RRSU 01/02/2013   13,298  
  RRSU 02/02/2015 25,157   25,158
B.A. van Kralingen RRSU 02/02/2015 25,157   25,158
J.E. Kelly III RRSU 12/30/2015 27,961 13,980 13,981

 

Vesting schedule for unvested PSUs

 

  Vesting Schedule
Name Grant Date Dec-2016 Dec-2017
V.M. Rometty 06/09/2014 70,834  
  06/08/2015   84,178
M.J. Schroeter 06/09/2014 20,556  
  06/08/2015   28,482
M.D. Rhodin 06/09/2014 18,334  
  06/08/2015   28,482
B.A. van Kralingen 06/09/2014 21,667  
  06/08/2015   28,482
J.E. Kelly III 06/09/2014 22,223  
  06/08/2015   31,646