IBM believes that all reports for IBM’s executive officers and directors that were required to be filed under Section 16 of the Securities Exchange Act of 1934 in 2018 were timely filed with the exception of one report covering one purchase transaction by Mr. Farr.

Ownership of Securities

Security Ownership of Certain Beneficial Owners

The following sets forth information as to any person known to IBM to be the beneficial owner of more than five percent of IBM’s common stock as of December 31, 2018.

Name and Address Number of Shares Beneficially Owned Percent of Class
The Vanguard Group (1)
100 Vanguard Boulevard
Malvern, PA 19355
71,693,361 7.88%
BlackRock Inc. (2)
55 East 52nd Street
New York, NY 10022
61,367,009 6.8%
State Street Corporation (3)
State Street Financial Center
One Lincoln Street
Boston, MA 02111
53,721,103 5.9%

(1) Based on the Schedule 13G filed with the Securities and Exchange Commission on February 13, 2019 by The Vanguard Group and certain subsidiaries (Vanguard). Vanguard reported that it had sole voting power over 1,107,829 shares, shared voting power over 222,932 shares, sole dispositive power over 70,386,753 shares, and shared dispositive power over 1,306,608 shares. The Schedule 13G does not identify any shares with respect to which there is a right to acquire beneficial ownership. The Schedule 13G states that the shares were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of IBM.

(2) Based on the Schedule 13G filed with the Securities and Exchange Commission on February 4, 2019 by BlackRock, Inc. and certain subsidiaries (BlackRock). BlackRock reported that it had sole voting power over 52,655,362 shares and sole dispositive power over all shares beneficially owned. The Schedule 13G does not identify any shares with respect to which there is a right to acquire beneficial ownership. The Schedule 13G states that the shares were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of IBM.

(3) Based on the Schedule 13G filed with the Securities and Exchange Commission on February 13, 2019 by State Street Corporation and certain subsidiaries (State Street). State Street reported that it had shared voting power over 43,572,745 shares and shared dispositive power over 53,711,151 shares. The Schedule 13G does not identify any shares with respect to which there is a right to acquire beneficial ownership. The Schedule 13G states that the shares were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of IBM.

(This information reflects the 2019 Proxy Statement)

Common Stock and Stock-based Holdings of Directors and Executive Officers

The following table sets forth the beneficial ownership of shares of IBM’s common stock as of December 31, 2018 by IBM’s current directors and nominees, the executive officers named in the 2018 Summary Compensation Table, and such directors and all of IBM’s executive officers as of December 31, 2018 as a group. Also shown are shares over which the named person could have acquired voting power or investment power within 60 days after December 31, 2018. Voting power includes the power to direct the voting of shares held, and investment power includes the power to direct the disposition of shares held.

IBM’s current non-management directors and nominees had beneficial ownership of a total of 257,268 shares of common stock and DCEAP shares as of December 31, 2018, an increase of nearly 12% year to year. In the aggregate, these shares were valued at more than $29 million as of December 31, 2018, or an average of more than $2.4 million for each of IBM’s non-management directors as of December 31, 2018.

      Acquirable within 60 days  
Name Common Stock(1) Stock-based Holdings(2) Options and RSUs(3) Directors' DCEAP Shares(4) Value of Common Stock shares at Fiscal Year End ($)(5)
Erich Clementi 31,080 89,493 12,579 N/A 3,532,864
Michael L. Eskew 0 0 0 31,574 3,589,017
David N. Farr 6,008 6,008 0 8,108 1,604,566
Alex Gorsky 0 0 0 9,420 1,070,771
Michelle Howard(8) 0 0 0 0 0
Shirley Ann Jackson 0 0 0 28,356 3,223,227
James J. Kavanaugh 46,655(6) 82,951 8,772 N/A 5,303,274
J.E. Kelly III 101,441(7) 160,593 0 N/A 11,530,798
Andrew N. Liveris 0 0 0 17,301 1,966,605
Hutham S. Olayan 0 0 0 6,544 743,856
James W. Owens 6,000 6,000 0 22,670 3,258,919
Martha E. Pollack(8) 0 0 0 0 0
Virginia M. Rometty 252,044 380,293 1,500,000 N/A 28,649,841
Martin J. Schroeter 56,481 125,297 25,158 N/A 6,420,195
Joseph R. Swedish 3,261(9) 3,261 0 1,653 558,574
Sidney Taurel 23,798 23,798 0 34,892 6,671,292
Peter R. Voser 0 0 0 8,810 1,001,433
Frederick H. Waddell 2,763 2,763 0 2,754 627,117
Directors and executive officers as a group 614,201(10) 1,078,133 1,559,088(10) 172,082(10)  
 

(1) This column is comprised of shares of IBM common stock beneficially owned by the named person. Unless otherwise noted, voting power and investment power in the shares are exercisable solely by the named person, and none of the shares are pledged as security by the named person. Standard brokerage accounts may include nonnegotiable provisions regarding set-offs or similar rights. This column includes 51,404 shares in which voting and investment power are shared. The directors and officers included in the table disclaim beneficial ownership of shares beneficially owned by family members who reside in their households. The shares are reported in such cases on the presumption that the individual may share voting and/or investment power because of the family relationship. The shares reported in this column do not include 17,347 shares held by the IBM Personal Pension Plan Trust Fund, over which the members of the IBM Retirement Plans Committee, a management committee presently consisting of certain executive officers of IBM, have voting power, as well as the right to acquire investment power by withdrawing authority now delegated to various investment managers.

(2) For executive officers, this column is comprised of the shares shown in the “Common Stock” column and, as applicable, all restricted stock units, including retention restricted stock units, officer contributions into the IBM Stock Fund under the IBM Excess 401(k) Plus Plan, and Company contributions into the IBM Stock Fund under the Excess 401(k) Plus Plan. Some of these restricted stock units may have been deferred under the Excess 401(k) Plus Plan in accordance with elections made prior to January 1, 2008, and they will be distributed to the executive officers after termination of employment as described in the 2018 Nonqualified Deferred Compensation Narrative.

(3) For executive officers, this column is comprised of (i) shares that can be purchased under an IBM stock option plan within 60 days after December 31, 2018, and (ii) RSU awards that will vest within 60 days after December 31, 2018. For Mrs. Rometty, shares in this column are from a premium-priced option grant that can be purchased pursuant to an IBM stock option plan within 60 days after December 31, 2018.

(4) Promised Fee Shares earned and accrued under the IBM Deferred Compensation and Equity Award Plan (DCEAP) as of December 31, 2018, including dividend equivalents credited with respect to such shares. Upon a director’s retirement, these shares are payable in cash or stock at the director’s choice (see 2018 Director Compensation Narrative for additional information).

(5) Values in this column are calculated by multiplying the number of shares shown in the “Common Stock” column plus the “Directors’ DCEAP Shares” column by the closing price of IBM stock on the last business day of the 2018 fiscal year ($113.67).

(6) Includes 15,174 shares in which voting and investment power are shared.

(7) Includes 26,547 shares in which voting and investment power are shared.

(8) Dr. Pollack joined the Board on February 1, 2019 and Admiral Howard joined the Board on March 1, 2019.

(9) Voting and investment power are shared.

(10) The total of these three columns represents less than 1% of IBM’s outstanding shares, and no individual’s beneficial holdings totaled more than 1/5 of 1% of IBM’s outstanding shares.

(This information reflects the 2019 Proxy Statement)

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