International Business Machines Corporation's (IBM) Chairman, President and CEO Virginia M. Rometty admits that the company failed to meet expectations in 2013. Rometty also witnessed a 14 percent drop in take-home pay.
IBM has struggled in the last few years due to a shift to the cloud era, where data and information are delivered online rather than being stored onsite. The demand for hardware has declined and sales growth has also slumped, which has reduced the revenue of the company for the last few quarters. Lower revenue may have also forced IBM to sell some assets and lay off employees. The company also bought back its shares and cut down on taxes to help meet its profit goals. Rometty has definitely found 2013 challenging and she also admitted that the company was unsuccessful in meeting some expectations in 2013.
"We must acknowledge that while 2013 was an important year of transformation, our performance did not meet our expectations. Our operating pre-tax income was down 8 percent. Our revenue in 2013, at $99.8 billion, was down 5 percent as reported and 2 percent at constant currency," said Rometty. "So, while we continue to remix to higher value, we must also address those parts of our business that are holding us back. We have two specific challenges, and we are taking steps to address both."
IBM announced that its software revenue in 2013 was $25.93 billion, which is an increase of 1.9 percent year-over-year. The company's total 2013 revenue was $99.75 billion, which is down by 4.6 percent when compared to 2013. Rometty also pointed out that the company's operating pre-tax income also declined 8 percent year-over-year.
Recently, IBM sold off its low-end servers business to Lenovo, but Rometty highlighted that the company is not exiting the hardware business.
"IBM will remain a leader in high-performance and high-end systems, storage and cognitive computing, and we will continue to invest in R&D for advanced semiconductor technology," said Rometty.
The CEO has also taken a hit when it comes to her personal take-home income. In 2013, Rometty was paid $13.97 million, which is down from $16.2 million in 2012. Rometty's base pay remained unchanged at $1.5 million per year. However, her cash bonus under the company's annual performance-based incentive program was cut to zero from $3.9 million in 2013, which was due to a decline in the company's revenue and related cash flow in 2013.
