Office space renovation? Yep.
Turns out, IBM treats former executives extremely well. Company spokesman Edward Barbini said the funds were spent to "establish an office for a former CEO off of the IBM campus." He would not say where the office is located or why it cost about a million dollars to staff and renovate. "I have nothing further to say on it," Barbini said.
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Critics of lavish executive compensation say that's money wasted—even on a widely-praised former CEO who drove earnings growth and stock market value.
"Does it make any sense at all? Are you kidding me? It's an outrage. Its horrifying," said Nell Minow, a long time CEO compensation expert and board member at the analysis firm GMI Ratings. "If anybody can pay for his own office space, it's the former CEO of IBM." Minow pointed out that shareholders will see very little result from that expenditure. "What is the return on investment for that? It's nothing."
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An IBM spokesman also confirmed another perk for Palmisano: A $20,000 per day consulting gig with the company. Here's how the deal is described in the company's proxy statement:
"After Mr. Palmisano's retirement, he may be asked, from time to time, to provide services to the Company as an independent contractor. The fee for such services would be $20,000 per day for each day he provides four or more hours of services and $10,000 per day for each day that he provides less than four hours. As of December 31, 2012, no consulting fees have been paid to Mr. Palmisano."
The office and consulting perks were disclosed in a March 15 item on the website Footnoted.com.