Dell Inc. trimmed CEO Michael Dell's pay by 14 percent to $13.9 million last year amid a slump that culminated in a proposed $24.4 billion deal that could end the personal computer maker's 25-year history as a publicly traded company.
Most of Michael Dell's compensation last year consisted of stock awards designed to give him a greater incentive to boost the Round Rock, Texas, company's market value.
Michael Dell's stock awards were valued at $11.6 million last year while his salary remained unchanged at $950,000, according to a company filing with securities regulators Monday. He also received perks and other benefits worth $19,122.
The company paid an aircraft leasing agency $2 million for Michael Dell's travel last year, but the amount wasn't included in his total compensation package. The bill was lower than the $2.3 million that the company paid an aircraft leasing agency for Michael Dell's travel in the previous year.
The Associated Press calculates an executive's total compensation by adding salary, bonuses, perks, above-market interest that the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits.
Dell's stock price has dropped sharply since Michael Dell returned for a second stint as CEO six years ago. That downturn enabled Michael Dell and a group of investors to negotiate an agreement to buy the company for $13.65 per share — more than 40 percent below where the stock stood upon Michael Dell's return as CEO.
Two of Dell's largest shareholders, billionaire Carl Icahn and Southeastern Asset Management, are trying to scuttle the sale to Michael Dell and his backers because they believe the price undervalues the company. Dell's board is recommending company shareholders approve the sale to the Michael Dell-led group in a meeting scheduled for July 18.
If the deal goes through, Dell will become a privately held company that no longer has to reveal how much it pays Michael Dell or other top executives.
The compensation disclosed Monday covers Dell's fiscal year ending Feb. 1 — four days before the company announced its deal with Michael Dell.
Dell's earnings dropped by 32 percent last year to $2.4 billion while revenue fell by 8 percent to $56.9 billion. Those declines are a primary reason that the company trimmed Michael Dell's performance-based cash bonus to $1.3 million last year from $3.3 million in the previous year.
The company's financial performance deteriorated largely because more technology spending is going toward smartphones and tablet computers instead of the laptop and desktop machines that Dell makes.
Michael Dell believes he can engineer a turnaround by expanding into more profitable segments in business software, data storage, and security — a transformation that he thinks will be easier to pull off if he doesn't have to cater to Wall Street's short-term demands for higher profits from one quarter to the next.