Dell Approves Retention Bonuses for Executives Amid Buyout Talks
Dell Inc. (DELL), the personal-computer maker considering buyout offers, approved cash retention bonuses for executives other than Chief Executive Officer Michael Dell.
The $91.1 million program includes “members of the executive leadership team, vice presidents and executive directors of the company who are critical to the company’s future success,” Dell said today in a regulatory filing. Participants can receive as much as 100 percent of their base salary, the company said, without giving individual figures.
Dell, based in Round Rock, Texas, is trying to secure executives’ loyalty as it goes through the buyout process amid falling demand for desktop and notebook PCs. Sales of those PC types, its core business, slid 8.2 percent in the fiscal year that ended Jan. 31, with a 20 percent drop in the final quarter.
Michael Dell, seeking to rally employees amid the buyout talks, said earlier this month that he has made headway in efforts to transform the computer maker into a broader provider of business products, according to a memo obtained by Bloomberg. Dell said in the memo that he intends to take the No. 1 spot in market share for servers from Hewlett-Packard Co. (HPQ) this year.
The bonuses will be based on fiscal 2014 free operating cash flow performance and will be payable in March 2014 for employees who remain continuously employed through that date, Dell said in today’s filing. They would be paid “regardless of whether a change in control takes place or Dell remains a publicly traded company,” according to the filing.
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