DEF 14A of International Business Machines Corp
Filed Mar 10, 2026 · FY20250000051143-26-000025
International Business Machines Corporation
| 4 | | | | | | Approval of 2026 long-term performance plan | | | | | | The Board recommends a vote FOR this proposal | See page 75 |
Governance highlights
| What we do | | | | Tie a significant portion of pay to Company performance | | | Mitigate risk taking by emphasizing long-term equity incentives, placing caps on potential payments, and maintaining robust clawback provisions | | | Require significant share ownership by the Chairman, President and CEO, Vice Chairman and Senior Vice Presidents | | | Utilize noncompetition and nonsolicitation agreements for senior executives | | | Remove impact of share repurchase on executive incentives |
Governance highlights
| What we don’t do | | | | No individual severance or change-in-control agreements for executive officers | | | No excise tax gross-ups for executive officers | | | No dividend equivalents on unearned RSUs/PSUs | | | No hedging/pledging of IBM stock | | | No stock option repricing, exchanges or stock options granted below market value | | | No guaranteed incentive payouts for executive officers | | | No accelerated vesting of equity awards for executive officers | | | No above-market returns on deferred compensation plans |
Governance highlights
| 8 | IBM |
Governance highlights
Overview IBM’s Board of Directors is responsible for supervision of the overall affairs of IBM. Following the Annual Meeting in 2026, the Board will consist of 13 directors. In between annual meetings, the Board has the authority under the by-laws to increase or decrease the size of the Board and to fill vacancies. Director selection process The Directors and Corporate Governance Committee is responsible for leading the search for qualified individuals for election as directors to ensure the Board has the optimal mix of skills, expertise, experience, and backgrounds. The Committee recommends candidates to the full Board for election.
Governance highlights
| Identification of candidates | | The Committee and Board identify candidates through a variety of means, including: •recommendations from members of the Committee and the full Board •information the Committee requests from the Secretary of IBM •suggestions from IBM management •a third-party search firm, from time to time | | | | | | | | | | | | | | Evaluation of candidates | | Candidate qualifications are reviewed by the Committee and subsequently by the Board in connection with the nomination of candidates for election at the Annual Meeting. Individuals are selected to join the Board based on their business or professional experience and the diversity of their backgrounds, skills, talents and perspectives – all in furtherance of the specific needs of IBM's business and what is in the best interests of you, IBM's stockholders. In January 2026, upon the recommendation of the Committee, the Board appointed Ramon Laguarta as a director, effective March 1, 2026. For more information on the skills and experience of Mr. Laguarta, please see "Election of directors for a term of one year." | | | | | | | | | | | | | | Proxy voting at the annual meeting | | You, our stockholders, annually vote upon each director's election to the Board. With the exception of Ramon Laguarta, who joined the Board in March 2026, all of our current directors were elected by a majority of our stockholders at the 2025 Annual Meeting. | | | | | | The result of this selection process is a slate of 13 director nominees with the optimal mix of skills, expertise, experience, and backgrounds. Each of our directors has the following key attributes, which are necessary for the continued vitality of the Board and excellence in the execution of its duties: | | | | | | | | | Diversity diversity of backgrounds, skills, talents and perspectives | | | Sound judgment mature and practical judgment | | Soft skills effective interpersonal and communication skills | | | Leadership experience as a leader of a business, firm or institution | | | Analytical the ability to comprehend and analyze complex matters, including technology and digital innovation | | Integrity strong character and integrity |
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 9 |
Governance highlights
Building the right board for IBM The IBM Board is composed of a diverse group of members, all leaders in their respective fields. All current directors have leadership experience at major domestic and international organizations with operations inside and outside the United States, at academic or research institutions, or in government. Directors also have deep corporate governance expertise, which enables them to guide your Company and achieve its strategic goals. In addition to the key attributes of our directors, we have identified core director competencies. These core competencies are crucial to the success of the IBM Board of Directors. Our directors have the breadth of experiences, leadership and accountability to oversee the scale and complexity of IBM’s business.
Governance highlights
| Core director competencies | |
Governance highlights
| | | | | Organizational and leadership management For over a century, IBM has continuously reinvented itself to help its clients move from one era to the next. The ability to comprehend and analyze complex matters, including technology, is key to the IBM Board’s oversight of the Company’s innovation and digital transformation. All IBM directors have led large organizations, crucial experience for understanding and overseeing the scale, scope, and complexity of IBM’s business. | Global business and operations IBM conducts business around the globe. Our business success is derived from an understanding of diverse business environments and economic conditions and a broad perspective on global business opportunities. The Board’s diversity and international experience is crucial for IBM, which does business in more than 175 countries around the world. | Corporate governance Strong governance practices further our business objectives and protect the long-term interests of you, our stockholders. Every IBM director supports IBM’s goals of strong board and management accountability, responsiveness, transparency, and protection of stockholder interests. |
Governance highlights
Industry expertise IBM uniquely combines innovative technology with deep industry expertise, underpinned by security, trust, and responsible stewardship. IBM’s directors have experience leading organizations in a variety of industries that enhance the Board’s knowledge. Their perspectives on contemporary business issues and experience running data-intensive organizations are an asset to the Company and to our stockholders.
Governance highlights
| | | | | | | | Financial Services & Insurance | Healthcare | Energy | Pharmaceuticals | Chemicals | Transport & Logistics |
Governance highlights
| | | | | | | Manufacturing | Private Equity | Research & Development | Government | Information Technology |
Governance highlights
| 10 | IBM |
Governance highlights
IBM Board of directors – experience and skills of director nominees The skills matrix below identifies each director’s top five strategic skills. This matrix is not intended to be an exhaustive list of director skills, and each director possesses additional strategic skills not reflected through the checkmarks, as well as other skills not listed in the matrix. We believe this approach enables you, our stockholders, to understand better the key contributions each director brings as part of the Board’s comprehensive skill set, which supports the strategic oversight of IBM.
Governance highlights
| | | | | | | | | | | | | | | | | Core competencies | | | | | | | | | | | | | | | | | Organizational Leadership and Management | | | | | | | | | | | | | | | | | With experience as a leader of a business, firm, or institution, brings strong leadership qualities, encourages diverse and thoughtful dialogue and decision-making, and understands the practical implications of IBM’s scale, scope, and complexity. | | | | | | | | | | | | | | | Global Business and Operations | | | | | | | | | | | | | | | | | Brings global experience and perspective for IBM’s operations, and engages to support IBM’s international footprint. | | | | | | | | | | | | | | | Corporate Governance | | | | | | | | | | | | | | | | | Supports IBM’s goals of strong Board and management accountability, responsiveness, transparency, and protection of stockholder interests. | | | | | | | | | | | | | | Strategic skills | | | | | | | | | | | | | | | | | Risk Oversight/Risk Management | | | | | | | | | | | | | | | | | Provides key insight into IBM’s regulatory environment, helping to identify, understand, and oversee the risks facing IBM. | | | | | | | | | | | | | | | Innovation and Emerging Technologies | | | | | | | | | | | | | | | | | Encourages IBM to engage in disruptive innovation, evaluate emerging technologies, and extend or create new business models. | | | | | | | | | | | | | | | Cybersecurity | | | | | | | | | | | | | | | | | Brings experience managing cybersecurity and information security risks and an understanding of the cybersecurity threat landscape, and provides valuable knowledge and guidance in oversight of IBM’s cyber governance process. | | | | | | | | | | | | | | | Government, Public Policy and Regulatory Affairs | | | | | | | | | | | | | | | | | Provides government, regulatory and policy experience, valuable to IBM’s engagement with governments around the world on regulatory and policy issues, and assists in identifying and understanding compliance issues and the effect of regulations on IBM. | | | | | | | | | | | | | | | Financial Expertise/Literacy | | | | | | | | | | | | | | | | | Brings an understanding of complex finance, investment, and financial reporting processes to analyze, assess and oversee IBM’s operating and strategic performance and its financial reporting and controls. | | | | | | | | | | | | | | | Human Capital Management | | | | | | | | | | | | | | | | | Brings expertise to help ensure that IBM attracts top talent, maintains robust development, retention and succession planning practices, and realizes its firm commitment to an inclusive and impactful workforce. | | | | | | | | | | | | | | | Strategy/ Business Development | | | | | | | | | | | | | | | | | Contributes a practical understanding of developing, implementing, and assessing business development strategies and key transactions and initiatives. | | | | | | | | | | | | |
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 11 |
Governance highlights
| 1 | Election of directors for a term of one year | | Board’s Recommendation: Vote FOR the election of each director nominee. Vote Required: A director nominee will be elected if the number of votes cast for that director nominee exceeds the number of votes cast against that director nominee. | | | The Board proposes the election of the following director nominees for a term of one year. Below is information about each nominee, including biographical data for at least the past five years. If one or more of these nominees become unavailable to accept a nomination or election as a director, the individuals named as proxies on the proxy card will vote the shares that they represent for the election of such other persons as the Board may recommend, unless the Board reduces the number of directors. | |
Governance highlights
| | | | | | | | | Marianne C. Brown Former Chief Operating Officer, Global Financial Solutions, Fidelity National Information Services, Inc. Director since: 2023 Age: 67 | | | Thomas Buberl Chief Executive Officer, AXA S.A. Director since: 2020 Age: 52 | | | | | | | Committee: | | | | | | | | Executive Compensation and Management Resources (Chair effective April 28, 2026) | | | Committee: | | | | | | | | Directors and Corporate Governance | | | | | Experience Ms. Brown, 67, served as chief operating officer of Fidelity National Information Services, Inc.’s (FIS) Global Financial Solutions organization from January 2018 to June 2019. Prior to that, Ms. Brown served as chief operating officer, Institutional and Wholesale Business of FIS, when it acquired SunGard Financial Systems. In 2014, Ms. Brown was chief operating officer of SunGard Financial Systems. From 2006 to 2014, Ms. Brown was the chief executive officer and president of Omgeo LLC. Before joining Omgeo LLC, she was the chief executive officer of the Securities Industry Automation Corporation. She is a director of Northrop Grumman Corporation, The Charles Schwab Corporation, and Akamai Technologies, Inc., and served on the board of VMware, Inc. until 2023. Key contributions •In depth knowledge of cybersecurity and emerging technologies through her various roles at financial services technology companies •Significant experience with risk oversight and management as former chief executive officer of Omgeo LLC •Global operational management experience, including mergers and acquisitions, integration and transformation, as chief operating officer, Global Financial Solutions, FIS | | | Experience Mr. Buberl, 52, joined Winterthur in 2005, which became a subsidiary of AXA in 2006. In 2008, he joined Zurich Insurance Group as chief executive officer for Switzerland. Mr. Buberl returned to AXA in 2012 as chief executive officer for AXA Konzern AG (Germany) and he became a member of AXA’s executive committee. In 2015, Mr. Buberl became the chief executive officer of AXA’s health business and a member of AXA’s group management committee. Mr. Buberl was additionally appointed chief executive officer of AXA’s global business line for life and savings and deputy chief executive officer of AXA in early 2016. He was named chief executive officer and joined the board of directors of AXA in September 2016. He is a member of the supervisory board of Bertelsmann, a member of the Climate Finance Leadership Initiative and the former chair of the Pan-European Insurance Forum. Additionally, during the past five years, he was a director of AXA Equitable Holdings, Inc., a former subsidiary of AXA S.A. Key contributions •Extensive global business leadership and risk management experience as chief executive officer of AXA S.A. •Financial, strategic and operational experience •Acknowledged leader in digital transformation | | |
Governance highlights
| Top strategic skills | | | | | | Top strategic skills | | | | | | | | Risk Oversight/ Risk Management | | Innovation and Emerging Technologies | | Cybersecurity | | Risk Oversight/ Risk Management | | Innovation and Emerging Technologies | | Human Capital Management | | | Human Capital Management | | Strategy/ Business Development | | | | Financial Expertise/ Literacy | | Strategy/ Business Development | | |
Governance highlights
| 12 | IBM |
Governance highlights
| | | | | | | | | David N. Farr Retired Chairman and Chief Executive Officer, Emerson Electric Co. Director since: 2012 Age: 71 | | | Alex Gorsky Former Chairman and Chief Executive Officer, Johnson & Johnson Director since: 2014 Age: 65 | | | | Committee: | | | Committee: | | | | | Audit Audit Committee Financial Expert | | | Executive | | Experience Mr. Farr, 71, joined Emerson in 1981 and subsequently held various executive positions. He was named senior executive vice president and chief operating officer in 1999, chief executive officer in 2000, and chairman and chief executive officer in 2004. Mr. Farr was named chairman, president and chief executive officer in 2005 and chairman and chief executive officer in 2010, positions he held until his retirement in 2021. He is the former chairman of the National Association of Manufacturers and is a former director of the U.S.-China Business Council. Key contributions •Global leadership, business and technology experience as former chairman and chief executive officer of Emerson Electric Co. •Strong understanding of regulatory and public policy issues as former director of the U.S.-China Business Council •Significant expertise in several areas including strategy, mergers and acquisitions and risk management | | | Experience Mr. Gorsky, 65, is the former chairman and chief executive officer of Johnson & Johnson, and one of just seven leaders to have served in the dual role of chairman and chief executive officer since the company was listed on the New York Stock Exchange in 1944. He joined Johnson & Johnson in 1988 as a sales representative with Janssen Pharmaceutica. In 2003, he was named company group chairman of the Johnson & Johnson pharmaceutical business in Europe, the Middle East and Africa. Mr. Gorsky left Johnson & Johnson in 2004 to join the Novartis Pharmaceuticals Corporation, where he served as head of the company’s pharmaceutical business in North America. Mr. Gorsky returned to Johnson & Johnson in 2008 as company group chairman for Ethicon. In early 2009, he was appointed worldwide chairman of the Surgical Care Group and member of the executive committee. In September 2009, he was appointed worldwide chairman of the Medical Devices and Diagnostics Group and became vice chairman of the executive committee in January 2011. He was named chief executive officer and joined the board of directors in April 2012, and was named chairman of the board of directors in December 2012. Mr. Gorsky remained chief executive officer until he transitioned to executive chairman at the end of 2021. He currently sits on the boards of Apple, JPMorgan Chase and the Travis Manion Foundation, and serves on the Board of Advisors for the Wharton School of the University of Pennsylvania. Key contributions •Extensive global business experience and knowledge of financial and strategic issues and risk management as former executive chairman and chief executive officer of Johnson & Johnson •Deep understanding of complex operational issues facing multinational companies, including technology evolution and research and development •Public policy expertise as former Chair of the Business Roundtable’s Corporate Governance Committee and former member of the Business Council Executive Committee | | |
Governance highlights
| Top strategic skills | | | | | | Top strategic skills | | | | | | | | Risk Oversight/ Risk Management | | Innovation and Emerging Technologies | | Government, Public Policy and Regulatory Affairs | | Risk Oversight/ Risk Management | | Innovation and Emerging Technologies | | Financial Expertise/ Literacy | | | Financial Expertise/ Literacy | | Strategy/ Business Development | | | | Human Capital Management | | Strategy/ Business Development | | |
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 13 |
Governance highlights
| | | | | | | | | Michelle J. Howard Retired Admiral, United States Navy Director since: 2019 Age: 65 | | | Arvind Krishna Chairman, President and Chief Executive Officer, IBM Director since: 2020 Age: 63 | | | | Committee: | | | | | | | | | | Committee: | | | | | Audit Audit Committee Financial Expert | | | | | | | | | | Executive (Chair) | | Experience Admiral Michelle J. Howard, 65, is a retired U.S. Navy officer. Admiral Howard began serving in the U.S. Navy in 1982, after graduating from the U.S. Naval Academy. During her 35 years of service, she led sailors and marines as, at various times, the Commander of a ship, an Expeditionary Strike Group, a Task Force, and a Naval theater. In 1999, she became the first African American woman to command a ship in the U.S. Navy. In 2014, she was the first woman to become a four-star admiral in the U.S. Navy and the first woman and African American to be appointed to the position of Vice Chief of Naval Operations, the second-highest ranking uniformed officer in the branch. Responsible for the Navy’s day-to-day operations, she focused on cyber culture and information security in the digital age, as well as gender integration, in addition to oversight of a multi-billion dollar budget and the establishment of an auditing framework. In 2016, Admiral Howard was appointed by the President to serve as commander of U.S. Naval Forces in Europe and Africa and the Allied Joint Forces Command in Naples, Italy, making her the first woman four-star admiral to command operational forces. She retired from the Navy in 2017. Admiral Howard’s distinguished career in national defense has included both at-sea and ashore posts, placing her in key leadership positions within the areas of engineering, operations, and strategic planning and policy. Admiral Howard is a graduate of the U.S. Naval Academy and the U.S. Army Command and General Staff College. She was the J.B. and Maurice C. Shapiro Professor of International Affairs at the Elliott School of International Affairs at George Washington University from 2018 to 2020, where she taught in the areas of cybersecurity and international policy. She was appointed by the President to the Board of Visitors of the U.S. Naval Academy in 2022 and served through the end of 2024. In 2025, Admiral Howard was appointed to serve as a Distinguished Non-Resident Fellow at the Georgetown Institute for Women, Peace and Security. Key contributions •Extensive global operations and risk management expertise as the U.S. Navy’s first woman four-star admiral •Deep government relationships and public policy expertise •Technology and cybersecurity experience as Vice Chief of Naval Operations | | | Experience Arvind Krishna, 63, became the chief executive officer of IBM, and a member of the Board of Directors, in April 2020. He was elected chairman of the Board of Directors in December 2020. Mr. Krishna joined IBM in 1990. Mr. Krishna led the IBM Cloud and Cognitive Software business unit from 2017 to April 2020 and was a principal architect of the acquisition of Red Hat, the largest acquisition in the Company’s history. Mr. Krishna also served as the director of IBM’s Research division from 2015 to 2020. Previously, he was general manager of IBM’s Systems and Technology Group, IBM’s development and manufacturing organization. Prior to that, he built and led many of IBM’s data-related businesses. In 2022, he became a director of the Federal Reserve Bank of New York. He is also a director of Northrop Grumman Corporation. Mr. Krishna is also on the Board of Directors of the U.S.-India Strategic Partnership Forum and is a Vice Chair of The Economic Club of New York. He has an undergraduate degree from the Indian Institute of Technology, Kanpur, and a PhD in electrical engineering from the University of Illinois at Urbana-Champaign. Key contributions •Deep knowledge of IBM’s business, the opportunities and challenges IBM faces and its strategy as chairman, president and chief executive officer of IBM •Extensive research and technology experience as Director of IBM Research and a computer scientist with expertise in key IBM technologies such as artificial intelligence, cloud and quantum computing •Outside board experience, which provides perspectives on other industries and corporate governance matters | | |
Governance highlights
| Top strategic skills | | | | | | Top strategic skills | | | | | | | | Risk Oversight/ Risk Management | | Cybersecurity | | Government, Public Policy and Regulatory Affairs | | Risk Oversight/ Risk Management | | Innovation and Emerging Technologies | | Financial Expertise/ Literacy | | | Financial Expertise/ Literacy | | Strategy/ Business Development | | | | Human Capital Management | | Strategy/ Business Development | | |
Governance highlights
| 14 | IBM |
Governance highlights
| | | | | | | | | Ramon Laguarta Chairman and Chief Executive Officer, PepsiCo, Inc. Director since: 2026 Age: 62 | | | Andrew N. Liveris Retired Chairman and Chief Executive Officer, The Dow Chemical Company Director since: 2010 Age: 71 | | | | Committee: | | | Committees: | | | | | Directors and Corporate Governance | | | Directors and Corporate Governance (Chair) | | | | | | | Executive | | Experience Mr. Laguarta, 62, serves as chairman and chief executive officer at PepsiCo. He was appointed CEO in 2018 and became chairman of its Board of Directors in 2019. He joined PepsiCo in 1996 and has held numerous leadership roles across Europe and global markets, including president of PepsiCo from 2017 to 2018, CEO of Europe Sub-Saharan Africa from 2015 to 2017, and CEO of PepsiCo Europe in 2015. Earlier roles included president, developing & emerging markets, PepsiCo Europe from 2012 to 2015, and senior commercial and general management positions in Europe. Prior to joining PepsiCo, Mr. Laguarta worked for Chupa Chups, S.A., where he held several international assignments in Asia, Europe, the Middle East and the United States. He currently serves on the board of the Business Roundtable and is Co-Chair of the World Economic Forum's Board of Stewards for the Food Systems Initiative. Key contributions •Deep expertise in global business strategy, with a proven ability to identify and capitalize on growth opportunities, mitigate risks, and navigate regulatory and competitive challenges •Extensive financial expertise, with strategic financial planning across multi-jurisdictional, complex business units •Proven leader of innovation and emerging technology, with experience digitally transforming operations and product innovation | | | Experience Mr. Liveris, 71, joined Dow in 1976 and subsequently held various executive positions before being named president and chief executive officer of Dow in 2004 and chairman in 2006. He continued as chairman and chief executive officer of Dow until late 2017, when he transitioned to the position of executive chairman of DowDuPont, a position he held until his retirement in July 2018. Mr. Liveris is a director of Worley, Saudi Aramco and Lucid Motors. He served as a director of NOVONIX Limited until April 2024. Additionally, Mr. Liveris is a former Executive Committee member of The Business Council, the former chairman of The Business Council and the former vice chairman of the Executive Committee of the Business Roundtable. Mr. Liveris is also a trustee of The King Abdullah University of Science and Technology (KAUST), and is a former trustee of the California Institute of Technology and the United States Council for International Business. He is also the president of the Brisbane 2032 Olympic and Paralympic Games Organizing Committee. Key contributions •Global business leadership and risk management experience as the former chairman, president and chief executive officer of Dow and former executive chairman of DowDuPont Inc. •Extensive government and public policy experience, including as former Chairman of the Business Council and of the US Government Manufacturing Council under President Trump and President Obama •Operations, strategy and corporate governance experience across various industries | | |
Governance highlights
| Top strategic skills | | | | | | Top strategic skills | | | | | | | | Risk Oversight/Risk Management | | Innovation and Emerging Technologies | | Government, Public Policy and Regulatory Affairs | | Risk Oversight/ Risk Management | | Innovation and Emerging Technologies | | Government, Public Policy and Regulatory Affairs | | | Financial Expertise/Literacy | | Strategy/ Business Development | | | | Human Capital Management | | Strategy/ Business Development | | |
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 15 |
Governance highlights
| | | | | | | | | Frederick William McNabb III Retired Chairman and Chief Executive Officer, The Vanguard Group, Inc. Director since: 2019 Age: 68 | | | Michael Miebach Chief Executive Officer, Mastercard Incorporated Director since: 2023 Age: 57 | | | | | | | Committee: | | | | | | | | Executive Compensation and Management Resources | | | Committee: | | | | | | | | Audit Audit Committee Financial Expert | | | | | Experience Mr. McNabb, 68, served as chairman of The Vanguard Group, Inc. from 2008 until his retirement in 2018 and served as chief executive officer from 2008 to 2017. He joined Vanguard in 1986. In 2010, he became chairman of the board of directors and the board of trustees of the Vanguard group of investment companies. Earlier in his career, Mr. McNabb led each of Vanguard’s client facing business divisions. Mr. McNabb served as the vice-chairman of the Investment Company Institute’s Board of Governors and served as its chairman from 2013 to 2016. He is a director of UnitedHealth Group and serves as the chair of its audit committee. He is also a director of Axiom. Mr. McNabb is the former chairman of the board of the Zoological Society of Philadelphia, chairman of the USRowing Foundation, and former chairman of Ernst & Young’s Independent Audit Quality Committee. Mr. McNabb also serves on the Wharton Leadership Advisory Board, the Advisory Board of the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia University and is also a board member of CECP: The CEO Force for Good. Key contributions •Extensive global business experience and knowledge of financial and strategic issues and risk management as former executive chairman and chief executive officer of Vanguard •Significant experience in corporate governance and risk management as a director of UnitedHealth Group and Axiom and an Advisory Board Member for the Ira M. Millstein Center for Global Markets and Corporate Ownership •Significant financial expertise and understanding of financial reporting and accounting principles | | | Experience Mr. Miebach, 57, is the chief executive officer of Mastercard and a member of its board of directors. He joined Mastercard in 2010 to lead its Middle East and Africa operations, before becoming chief product officer in 2016. As Mastercard’s chief product officer, he gained essential perspective into consumer insights as well as valuable experience in information security and innovation. Mr. Miebach became president in 2020 and then chief executive officer in 2021. Prior to joining Mastercard, Mr. Miebach held senior roles at Barclays Bank and CitiBank. Mr. Miebach is a member of the Business Roundtable, the International Advisory Panel of the Monetary Authority of Singapore and the International Business Council of the World Economic Forum. He sits on the board of directors for the Metropolitan Opera, the World Resources Institute, and the American Red Cross. Key contributions •Extensive global business and risk management experience as chief executive officer of Mastercard •Deep understanding of emerging technology, digital transformation and cybersecurity •Strong understanding of public policy issues as a member of the Business Roundtable and the International Business Council of the World Economic Forum | | |
Governance highlights
| Top strategic skills | | | | | | Top strategic skills | | | | | | | | Risk Oversight/ Risk Management | | Cybersecurity | | Financial Expertise/ Literacy | | Risk Oversight/ Risk Management | | Cybersecurity | | Government, Public Policy and Regulatory Affairs | | | Human Capital Management | | Strategy/ Business Development | | | | Financial Expertise/ Literacy | | Innovation and Emerging Technologies | | |
Governance highlights
| 16 | IBM |
Governance highlights
| | | | | | | | | Martha E. Pollack President Emerita, Cornell University Director since: 2019 Age: 67 | | | Peter R. Voser Retired Chief Executive Officer, Royal Dutch Shell plc Director since: 2015 Age: 67 | | | | Committee: | | | Committees: | | | | | Executive Compensation and Management Resources | | | Audit (Chair) Audit Committee Financial Expert | | | | | | | Executive | | Experience Dr. Pollack, 67, is president emerita of Cornell University, where she was also professor of computer science, information science, and linguistics. She took office in 2017 and retired in June 2024. From 2000 to 2017, Dr. Pollack held various positions at the University of Michigan with increasing responsibility, including dean of the School of Information, vice provost for academic and budgetary affairs, and finally, provost and executive vice president for academic affairs. Dr. Pollack is a fellow of the American Association for the Advancement of Science, the Association for Computing Machinery, and the Association for the Advancement of Artificial Intelligence. Dr. Pollack has served as editor-in-chief of the Journal of Artificial Intelligence Research, and has also been president of the Association for the Advancement of Artificial Intelligence, a member of the technical staff in the Artificial Intelligence Center at SRI International, a member of the advisory committee for the National Science Foundation’s Computer and Information Science and Engineering Division, and a member of the board of directors of the Computing Research Association. Dr. Pollack also served on the Steering Committee of the Jacobs Technion-Cornell Institute, the academic partnership between Cornell and Technion-Israel Institute of Technology at Cornell Tech. She is a former board member of the American Association of Universities. She is currently a Trustee of ITHAKA. In 2022, Dr. Pollack was elected as a member of the American Academy of Arts & Sciences. In 2025, she was named a Montgomery Fellow at Dartmouth College. Key contributions •Organizational leadership, management and risk oversight, and management experience as president emerita of Cornell University •Research and technology experience as a computer scientist with expertise in artificial intelligence as a professor of computer science, information science, and linguistics •U.S. government service as a former member of the advisory committee for the National Science Foundation’s Computer and Information Science and Engineering Division | | | Experience Mr. Voser, 67, joined Shell in 1982 and held a variety of finance and business roles including chief financial officer of Oil Products. In 2002, he joined the Asea Brown Boveri (ABB) Group of Companies as chief financial officer and a member of the ABB Group executive committee. Mr. Voser returned to Shell in 2004, becoming a managing director of The Shell Transport and Trading Company, p.l.c. and chief financial officer of the Royal Dutch/Shell Group. He was appointed chief executive officer of Royal Dutch Shell plc in 2009 and held that position until his retirement in late 2013. Mr. Voser was named chairman of ABB Ltd. in 2015 and was the interim chief executive officer from April 2019 until February 2020. He is a director of Temasek Holdings (Private) Limited, as well as Group Chairman of the Board of PSA International Pte Ltd, Singapore, a Temasek subsidiary. Mr. Voser is also active in a number of international and bilateral organizations. Additionally, from 2011 until 2019, he was a director of Roche Holding Limited. Key contributions •Significant financial expertise and understanding of financial reporting and accounting principals as former chief financial officer of Royal Dutch/Shell Group •Extensive experience with complex operational issues facing multinational companies and risk management as chairman of ABB Ltd. and chief executive officer of Royal Dutch Shell plc •Deep understanding of emerging technology, digital transformation and cybersecurity | | |
Governance highlights
| Top strategic skills | | | | | | Top strategic skills | | | | | | | | Risk Oversight/ Risk Management | | Innovation and Emerging Technologies | | Cybersecurity | | Risk Oversight/ Risk Management | | Innovation and Emerging Technologies | | Strategy/ Business Development | | | Government, Public Policy and Regulatory Affairs | | Human Capital Management | | | | Human Capital Management | | Financial Expertise/ Literacy | | |
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 17 |
Governance highlights
| | | | | | Alfred W. Zollar Former Executive Advisor, Siris Capital Group, LLC Director since: 2021 Age: 71 | | | | Committee: | | | | | Directors and Corporate Governance | | Experience Mr. Zollar, 71, served as a former executive advisor at Siris Capital Group, a private equity group specializing in technology and telecom investments, since March 2021; previously, Mr. Zollar was an executive partner from 2014 through March 2021. While at Siris Capital Group, Mr. Zollar worked closely with cloud-based technology providers, leading providers of enterprise security solutions and other technology and software-as-a-service companies. He served as a director of Red Hat from 2018 until 2019 and of Public Service Enterprise Group from 2012 until 2023. He is currently a director of Nasdaq Inc. and BNY. He is also a member of the Executive Leadership Council, a lifetime member of the National Society of Black Engineers and Harvard Fellow from the 2011 cohort of the Advanced Leadership Initiative at Harvard University. Mr. Zollar retired from IBM in 2011 following a 34-year career during which he held a variety of senior management positions in IBM’s systems and software groups. Key contributions •Global business and leadership experience as an executive partner and former executive advisor at Siris Capital Group •Deep technology experience with more than 40 years in systems and software at IBM and as a director of Red Hat •Extensive finance, strategy and corporate governance experience as a director of Nasdaq and BNY, and as a former director of Public Service Enterprise Group | | |
Governance highlights
| Top strategic skills | | | | | | | | Innovation and Emerging Technologies | | Cybersecurity | | Risk Oversight/ Risk Management | | | Human Capital Management | | Strategy/ Business Development | | |
Governance highlights
| 18 | IBM |
Governance highlights
Committees of the board Members of the Audit Committee, Directors and Corporate Governance Committee, and the Executive Compensation and Management Resources Committee are non-management directors who, in the opinion of the Board, satisfy the independence criteria established by the Board, and the standards of the Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE). Board committee refreshment On at least an annual basis, the Directors and Corporate Governance Committee reviews committee assignments and discusses whether rotation of committee members and committee chairs is appropriate to introduce fresh perspectives and to broaden and diversify the views and experiences represented on the Board’s committees.
Governance highlights
| | Executive Committee | | | | | | Arvind Krishna (Chair) Members: Alex Gorsky Andrew N. Liveris Peter R. Voser Frederick H. Waddell* Thomas Buberl** * Until April 28, 2026 ** Effective April 28, 2026 | Number of meetings in 2025: 0 |
Governance highlights
Key responsibilities: The Executive Committee is empowered to act for the full Board in intervals between Board meetings, with the exception of certain matters that by law may not be delegated. The Committee meets as necessary, and all actions by the Committee are reported at the next Board of Directors meeting. The Committee did not meet in 2025.
Governance highlights
| | Audit Committee | | | | | | Peter R. Voser (Chair) Members: David N. Farr Michelle J. Howard F. William McNabb III Audit Committee Financial Experts: David N. Farr Michelle J. Howard F. William McNabb III Peter R. Voser | Number of meetings in 2025: 8 |
Governance highlights
Key responsibilities: The Audit Committee is responsible for reviewing reports of IBM’s financial results, audit results, internal controls, and adherence to IBM’s Business Conduct Guidelines in compliance with applicable laws and regulations, including federal procurement requirements. Concurrent with that responsibility, set out more fully in its charter, the Audit Committee performs many other functions, including: •selecting the independent registered public accounting firm and reviewing its selection with the Board; •annually preapproving the proposed services to be provided by the accounting firm during the year; •receiving and discussing reports relating to key controls and processes, including cybersecurity, and publicly reported environment, social and governance data; •reviewing the procedures of the independent registered public accounting firm to ensure its independence with respect to the services performed for IBM; •meeting with management prior to each quarterly earnings release; and •holding regular private sessions with senior management, including IBM’s Chief Compliance Officer. The Audit Committee chair, pursuant to authority delegated by the Audit Committee, may approve engagements with the independent registered public accounting firm that are outside the scope of the services and fees approved by the Committee, which are later presented to the Committee. The Board has determined that each member of the Committee qualifies as an Audit Committee Financial Expert as defined by the rules of the SEC. Charter: https://www.ibm.com/auditcommcharter
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 19 |
Governance highlights
| | Directors and Corporate Governance Committee | | | | | | Andrew N. Liveris (Chair) Members: Marianne C. Brown Alfred W. Zollar Ramon Laguarta* * Effective March 1, 2026 | Number of meetings in 2025: 4 |
Governance highlights
Key responsibilities: The Directors and Corporate Governance Committee is devoted primarily to the continuing review and articulation of the governance structure and practices of the Board. Concurrent with that responsibility, set out more fully in its charter, the Directors and Corporate Governance Committee performs many other functions, including: •recommending qualified candidates to the Board for election as directors of IBM, including the slate of directors that the Board proposes for annual election by stockholders at the annual meeting, and planning for future Board and committee refreshment actions; •advising and making recommendations to the Board on all matters concerning directorship practices, and on the function and duties of the committees of the Board; •making recommendations to the Board on compensation for non-management directors; •overseeing policies and practices related to corporate social responsibility, sustainability and environmental, social, and governance matters; and •reviewing and considering stockholder proposals. As discussed above, the Committee is responsible for recommending qualified candidates to the Board for election as directors of IBM. The Committee recommends candidates based on their business or professional experience, the diversity of their backgrounds, and their skills, talents and perspectives. Charter: https://www.ibm.com/investor/att/pdf/IBM-Directors-and-Corporate-Governance-Committee-Charter.pdf
Governance highlights
| | Executive Compensation and Management Resources Committee | | | | | | Frederick H. Waddell (Chair)* Members: Thomas Buberl Michael Miebach Martha E. Pollack * Effective April 28, 2026, Mr. Buberl will become the Chair | Number of meetings in 2025: 5 |
Governance highlights
Key responsibilities: The Executive Compensation and Management Resources Committee has responsibility for defining and articulating IBM’s overall executive compensation philosophy, and administering and approving all elements of compensation for elected corporate officers. Concurrent with that responsibility, and set out more fully in its charter, the Committee performs many other functions, including: •reviewing and approving the corporate goals and objectives relevant to the Chairman, President and CEO’s compensation, evaluating performance in light of those goals and objectives and, together with the other independent directors, determining and approving the Chairman, President and CEO’s compensation based on this evaluation; •reviewing IBM’s talent management, inclusion and other management resources programs, including overseeing, along with the full Board, the succession-planning process of the CEO and other senior management positions; •approving, by direct action or through delegation, participation in, and all awards, grants, and related actions under, IBM’s equity plans; •reviewing the compensation structure for IBM’s officers and providing oversight of management’s decisions regarding performance and compensation of other employees; and •monitoring compliance with stock ownership guidelines. See the "2025 Report of the Executive Compensation and Management Resources Committee of the Board of Directors" starting on page 33 for more information about how the Committee considers executive compensation, including the role of executive officers and the compensation consultant. Members of the Committee are not eligible to participate in any of the plans or programs that the Committee administers. Charter: https://www.ibm.com/investor/att/pdf/Executive_Compensation_and_Management_Resources_Committee_Charter.pdf
Governance highlights
| 20 | IBM |
Governance highlights
Compensation committee interlocks and insider participation: None Messrs. Buberl, Miebach, Waddell and Dr. Pollack each served as members of the Executive Compensation and Management Resources Committee in 2025. All members of the Committee were independent directors, and no member was an employee or former employee of IBM. During 2025, none of our executive officers served on the compensation committee or board of directors of another entity whose executive officer served on our Executive Compensation and Management Resources Committee or Board. Therefore, there is no relationship that requires disclosure as a compensation committee interlock. Certain transactions and relationships Under IBM’s written related person transactions policy, information about transactions involving related persons is assessed by the independent directors on IBM’s Board. Related persons include IBM directors and executive officers, as well as immediate family members of directors and executive officers, and beneficial owners of more than five percent of IBM’s common stock. If the determination is made that a related person has a material interest in any IBM transaction, then IBM’s independent directors would review, approve or ratify it, and the transaction would be required to be disclosed in accordance with the SEC rules. If the related person at issue is a director of IBM, or a family member of a director, then that director would not participate in those discussions. In general, IBM is of the view that the following transactions with related persons are not significant to investors because they take place under IBM’s standard policies and procedures: the sale or purchase of products or services in the ordinary course of business and on an arm’s-length basis; employment by IBM where the compensation and other terms of employment are determined on a basis consistent with IBM’s human resources policies; and any grants or contributions made by IBM under one of its grant programs and in accordance with IBM’s corporate contributions guidelines. Corporate governance IBM’s Corporate governance principles IBM’s Board of Directors has long adhered to governance principles designed to ensure the continued vitality of the Board and excellence in the execution of its duties. For more than 25 years, the Board has had in place a set of governance guidelines reflecting these principles, including the Board’s policy of requiring a majority of the Board to be comprised of independent directors, the importance of equity compensation to align the interests of directors and stockholders, and the practice of regularly scheduled executive sessions, including sessions of non-management directors without members of management led by IBM’s independent Lead Director. The IBM Board Corporate Governance Guidelines reflect IBM’s principles on corporate governance matters, including a director overboarding policy. Compliance with this policy is subject to an annual review by the Directors and Corporate Governance Committee and the Board. The IBM Board Corporate Governance Guidelines are available at https://www.ibm.com/investor/att/pdf/IBM-Board-Corporate-Governance-Guidelines.pdf. IBM is committed to promoting high standards of ethical business conduct and compliance with applicable laws, rules and regulations. We have a code of ethics for directors, executive officers, and employees. The Business Conduct Guidelines are available at https://www.ibm.com/businessconductguidelines. Any amendment to, or waiver of, the Business Conduct Guidelines that applies to one of our directors or executive officers may be made only by the Board or a Board committee, and would be disclosed on IBM’s website. It is also the Company's policy to comply with applicable insider trading laws, rules and regulations, and any exchange listing standards when engaging in transactions in Company securities. IBM has an insider trading policy that governs purchases, sales and/or dispositions of IBM securities by our directors, executive officers and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations and NYSE listing standards. This policy is included as Exhibit 19 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The process by which stockholders and other interested parties may communicate with the Board or non-management directors of IBM is available at https://www.ibm.com/investor/governance/contact-the-board.
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 21 |
Governance highlights
Independent board
Governance highlights
| Under the IBM Board Corporate Governance Guidelines, the Directors and Corporate Governance Committee and the full Board annually review the financial and other relationships between the independent directors and IBM as part of the assessment of director independence. The Directors and Corporate Governance Committee makes recommendations to the Board about the independence of non-management directors, and the Board determines whether those directors are independent. In addition to this annual assessment, director independence is monitored by the Directors and Corporate Governance Committee and the full Board on an ongoing basis. | 92% 12 of our 13 director nominees are independent |
Governance highlights
The independence criteria established by the Board in accordance with NYSE requirements and used by the Directors and Corporate Governance Committee and the Board in their assessment of the independence of directors is available at https://www.ibm.com/investor/att/pdf/Independence_Standards.pdf. Applying those standards to IBM’s non-management director nominees and those directors who served in 2025 but not standing for election, the Committee and the Board have determined that each of the following has met the independence standards: M.C. Brown, T. Buberl, D.N. Farr, A. Gorsky, M.J. Howard, R. Laguarta, A.N. Liveris, M. Miebach, F.W. McNabb III, M.E. Pollack, P.R. Voser, F.H. Waddell, and A.W. Zollar. Director attendance In 2025, the Board held 7 meetings and the committees collectively met 17 times. The Board and the Directors and Corporate Governance Committee recognize the importance of director attendance at Board and committee meetings. In 2025: •Overall attendance at Board and committee meetings was over 97%; and •Attendance was at least 75% for each director. All directors attended IBM’s 2025 Annual Meeting of Stockholders. IBM’s policy with regard to Board members’ attendance at annual meetings of stockholders is available at https://www.ibm.com/investor/governance/director-attendance-at-annual-meeting-of-stockholders.
Governance highlights
| 22 | IBM |
Governance highlights
Independent leadership structure The Directors and Corporate Governance Committee is responsible for the continuing review of the governance structure of the Board, and for recommending to the Board those structures and practices best suited to IBM and its stockholders. The Committee and the Board recognize that different structures may be appropriate under different circumstances. Mr. Krishna serves as IBM’s Chairman, President and CEO and Mr. Gorsky serves as IBM’s independent Lead Director, a structure that the Directors and Corporate Governance Committee and the full Board believe is currently in the best interests of IBM and its stockholders. Among other factors, the Board considered and evaluated: the importance of consistent, unified leadership to execute and oversee the Company’s strategy; the strength of Mr. Krishna’s vision for the Company and the quality of his leadership; the strong and highly independent composition of the Board; the meaningful and robust responsibilities of the independent Lead Director; and the views and feedback heard from our investors through our ongoing engagement program over the years expressing support for IBM’s leadership structure. A strong, independent Lead Director with clearly defined duties and responsibilities further enhances the contributions of IBM’s independent directors, which have been and continue to be substantial. Mr. Gorsky has significant global business, technology, leadership, and oversight experience as the former chairman and chief executive officer of Johnson & Johnson. Given Mr. Gorsky’s extensive experience leading a global business similar in size and complexity to that of IBM, he plays a pivotal role as independent Lead Director in administering the Board’s risk oversight responsibility.
Governance highlights
| | The Board strongly believes that each company's circumstances dictate its optimal leadership structure, and IBM's current leadership structure strikes the right balance for the Company. Our Chairman, President and CEO promotes a clear, unified vision for the Company's strategy and provides the leadership critical for effectively and efficiently implementing the actions needed to ensure strong performance over the long term, while our Board and independent Lead Director ensure robust, independent oversight. |
Governance highlights
| Responsibilities and actions of the Lead Director | | | | | | Alex Gorsky Lead Director | As Lead Director, Mr. Gorsky has the following core responsibilities: | | | | | | | active participation in the strategic planning of the Board agendas and meetings, Board design and committee composition; | | authority to call meetings of the independent directors, at which he presides in lieu of the Chairman; | | | | approves information sent to the Board; | | serves as liaison between the Chairman and the independent directors; and | | | | reviews and approves meeting schedules to ensure there is sufficient time for discussion of all agenda items; | | | | | | | | if requested by major stockholders, ensures that he is available, as necessary, after discussions with the Chairman, President and Chief Executive Officer, for consultation and direct communication. | | | | presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors, which are held at every Board meeting; | | | | | In addition to these core responsibilities, the Lead Director engages in other regular activities, including: | | | | | | | one-on-one debriefs with the Chairman after each meeting; | | spends time with senior management outside of Board meetings to ensure a deep understanding of the business and strategy of, and risks to, the Company; | | | | analyzes CEO performance in executive session in conjunction with the Executive Compensation and Management Resources Committee Chair; | | | | | | | | maintains regular contact with members of the Board and meeting individually with each independent director; and | | | | leads the Board self-evaluation process, interviewing each director, together with the Chairman, and reviews the feedback received with the full Board; | | | | | | | | attends meetings held by each of the Board’s committees. |
Governance highlights
| The Board reviews our leadership structure annually to ensure the optimal structure for the strategy and oversight of the Company. |
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 23 |
Governance highlights
Board evaluation process IBM’s independent Lead Director oversees a comprehensive, multi-part process for the Board’s ongoing self-evaluation to ensure that the Board is operating effectively and that its processes reflect best practices. In fact, this process was just recognized as the "Best Board Assessment Program" for 2025 at the Governance Intelligence Corporate Governance Awards. This process ensures that the full Board and each committee conduct an assessment of their performance and solicit feedback for enhancement and improvement, with action items tracked to completion, and a retrospective to assess how their time was spent, and what focus areas should be emphasized in the coming year. From time to time, this process also incorporates a third-party review of the Board’s process and evaluation criteria.
Governance highlights
| 1 | Full Board self-evaluation | The Lead Director leads the Board in conducting an annual self-evaluation to review the effectiveness of the Board and its committees. In this comprehensive review, the self-evaluation focuses on: •The composition and performance of the Board, including each director's individual performance and feedback related thereto, the size of the Board, mix of skills and experience and director refreshment practices; •The quality and scope of the materials distributed in advance of meetings; •The Board’s access to Company executives and operations; •The promotion of rigorous decision making by the Board and its committees; •The effectiveness of the Board and committee evaluation processes; and •The overall functioning of the Board and its committees. | | 2 | Committee self-evaluations | Each committee also performs a self-evaluation in executive session on an annual basis. The Audit Committee’s evaluation, for example, includes individual, one-on-one interviews between IBM’s internal Chief Auditor and each member of the Committee. | | 3 | Individual interviews with the Chairman of the Board and Lead Director | The Lead Director, together with the Chairman, interviews each IBM director individually to obtain his or her candid assessment of director performance, Board dynamics and the effectiveness of the Board and its committees. | | 4 | Presentation of feedback | The Lead Director shares insights from each of these meetings with the full Board. | | 5 | Results discussion | The Board meets in executive session to discuss the results of the evaluation and any other issues that the directors may want to raise. | | 6 | Follow-ups | Self-evaluation items requiring follow-up and execution are tracked on an ongoing basis by the Board, each of the committees, and by IBM management. Outcomes are reported back to the Board by the Lead Director. For example, in the 2024 Board self-evaluation, Board members expressed interest in having more external speakers to provide perspectives on various relevant topics. In turn, throughout 2025, Board agendas included external speakers in order to be responsive to that request. While this formal self-evaluation is conducted on an annual basis, the evaluation process is an ongoing process throughout the year. At each meeting, the Chairman actively solicits feedback from each individual director and directors continuously share their perspectives and suggestions. |
Governance highlights
| 24 | IBM |
Governance highlights
Risk oversight
Governance highlights
| At IBM, we believe that innovation and leadership are impossible without taking risks. We also recognize that imprudent acceptance of risk or the failure to appropriately identify and mitigate risk could negatively impact stockholder value. Oversight of IBM’s risk management processes is a shared responsibility: | | | | The Board of Directors and its Committees have responsibility for oversight of IBM’s risk management processes and controls and regularly receive reports from management on salient risks and mitigation strategies. The Committees regularly provide reports to the full Board on the risk areas they are responsible for and other risks that may emerge. | | The Company’s management is responsible for the day-to-day implementation and execution of risk management processes and controls, and for managing and addressing the risks identified through IBM’s comprehensive annual enterprise risk review. | | | | |
Governance highlights
IBM has a multi-faceted approach to identifying, managing and addressing risks A key component of IBM’s risk management strategy is the annual risk review conducted by the IBM Chief Risk Office. Our risk professionals rigorously analyze enterprise risks, incorporating both internal and external perspectives and data analytics into a comprehensive annual enterprise risk review that identifies the most salient risks facing IBM. Those risks include both market risks (such as cybersecurity, geopolitical tensions and trade, external economic and financial conditions) and business risks (such as hybrid cloud adoption, AI differentiation, talent management, and ecosystem adoption of IBM technology). Management participates in monthly emerging risk reviews to proactively identify and respond to changes in the business environment, and the Board is briefed on those risks. The management team or teams responsible for managing and addressing the risks identified through IBM’s comprehensive annual enterprise risk review regularly report to the Board and its Committees that have been delegated oversight responsibility to give visibility to the most salient risks facing the company, the impact they may have, and the company’s strategy to manage them. IBM’s risk professionals, including the Chief Risk Officer, work closely with senior management to integrate risk assessment into Board and Committee briefings on topics of strategic importance. For example:
Governance highlights
| | | | | | The IBM Chief Information Security Officer, whose team is responsible for leading enterprise-wide information security strategy, policy, standards, architecture and processes, and other senior leaders regularly report to the Audit Committee and the Board on threat intelligence, cyber risk areas, cybersecurity incidents, and ongoing cybersecurity initiatives. | The Chief Human Resources Officer regularly reports to the Executive Compensation and Management Resources Committee and the Board on the risks relating to compensation, pipeline, and talent management programs. | The Chief Legal Officer (CLO) and the Chief Compliance Officer (CCO) regularly report to the Audit Committee and the Board on regulatory and compliance-related matters, including litigation and investigations. The CCO reports to the CLO with dotted line reporting to the Audit Committee. | Each of the Chief Financial Officer (CFO) and the Senior Vice President, Strategy and Mergers & Acquisitions regularly reviews the Company’s strategic planning and analysis of transactions and other matters presented to the Board, including capital expenditures, acquisitions, divestitures and other portfolio actions, and operational and financial matters. | | The Board’s role in risk oversight of IBM is consistent with IBM’s leadership structure, with the CEO and other members of senior management having responsibility for assessing and managing IBM’s risk exposure, and the Board and its Committees providing oversight in connection with those efforts. Our risk oversight framework also aligns with our disclosure controls and procedures. For example, IBM’s quarterly and annual financial statements and related disclosures are reviewed by its Disclosure Committee, comprised of senior management including IBM’s Controller, Chief Auditor, CLO, CCO, and others, all of whom participate in the risk assessment practices described above. The CEO and CFO then receive a report from the Disclosure Committee and external auditor before the financial statements are reviewed with the Audit Committee and Board, approved, and then filed. | | | |
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 25 |
Governance highlights
Strategy oversight The Board actively oversees IBM’s long-term business strategy and is actively engaged in ensuring that IBM’s culture reflects its longstanding commitment to integrity, compliance, and inclusion. The Board is continuously engaged with management on these topics. For example, each year, the Board:
Governance highlights
| Holds a two-day strategy session, including presentations from and engagement with many senior executives across the Company | Routinely engages with senior management on critical business matters that tie to IBM’s overall strategy | Periodically travels to key IBM facilities to obtain a first-hand look at the Company's operations | Regularly meets with the next generation of leadership to ensure the pipeline remains inclusive and prepared to fuel the Company's growth | Participates in regular demonstrations of IBM’s latest technologies and innovations and meets with clients and other stakeholders to gain perspective on the Company | | | | | | |
Governance highlights
Succession planning IBM has long been recognized for its leadership and talent development. One of the Board’s most important responsibilities is to ensure that IBM has the appropriate management to execute the Company’s long-term strategy. To fulfill this responsibility, the full Board meets regularly to actively review and plan the succession of the CEO and other senior management positions.
Governance highlights
| In succession planning, the Board discusses: •Succession process and timeline •Profile and candidate assessments, both internal and external, for the CEO and other senior leadership positions •Leadership pipeline and development plans for the next generation of senior leadership •Addressing current and future skill gaps The Executive Compensation and Management Resources Committee also regularly reviews succession planning and the Company’s management resources programs, overseeing a broad range of talent management topics. |
Governance highlights
| 26 | IBM |
Governance highlights
Director compensation under the IBM deferred compensation and equity award plan (DCEAP)
Governance highlights
| 64% equity Payment required to be deferred and paid in Promised Fee Shares (PFS). Each PFS is equal in value to one share of IBM’s common stock. When a dividend is paid on IBM’s common stock, each director’s PFS account is credited with additional PFS reflecting a dividend equivalent payment. |
Governance highlights
| 36% choice of cash or equity Directors may elect to receive one or any combination of the following: (a)deferral into PFS, (b)deferral into an interest-bearing cash account, and/or (c)receipt of cash payments on a quarterly basis during service as a Board member. |
Governance highlights
| Additional annual retainers | | | Chair of the Directors and Corporate Governance Committee | $25,000 | | Chair of the Executive Compensation and Management Resources Committee | $25,000 | | Chair of the Audit Committee | $35,000 | | Lead Director | $65,000 |
Governance highlights
Stock ownership guidelines: •Under the IBM Board Corporate Governance Guidelines, within five years of initial election to the Board, non-management directors are expected to have stock-based holdings in IBM equal in value to eight times the equity portion of the annual retainer initially payable to such director •Stock-based holdings mean (i) IBM shares owned personally or by members of immediate family sharing the same household, and (ii) DCEAP PFS. Stock-based holdings do not include unexercised stock options •Our stock ownership guidelines remain among the strongest in our peer group Payout under the DCEAP: Upon a director’s retirement or other completion of service as a director (a) all amounts deferred as PFS are payable, at the director’s choice, in cash and/or shares of IBM’s common stock, and (b) amounts deferred into the interest-bearing cash account are payable in cash. Payouts may be made in any of (a) a lump sum payment as soon as practicable after the date on which the director ceases to be a member of the Board, (b) a lump sum payment paid in February of the calendar year immediately following the calendar year in which the director ceases to be a member of the Board, or (c) between two and ten annual installments, paid beginning in February following the calendar year in which the director ceases to be a member of the Board. If a director elects to receive PFS in cash, the payout of PFS is valued using the closing price of IBM common stock on the NYSE as follows: for payouts made in an immediate lump sum, IBM common stock will be valued on the first day after the date on which the director ceases to be a member of the Board; for lump sum payments made in February of the calendar year immediately following the calendar year of separation or for installment payouts, IBM common stock will be valued on the last business day of the January preceding such February payment. IBM’s matching grants program: •In 2025, non-management directors were eligible to participate in IBM’s Matching Grants Program on the same basis as IBM’s employees based in the U.S •Under this program, IBM matched a director’s eligible contributions in cash on a 1-to-1 basis to approved educational institutions, medical facilities and cultural or environmental institutions •Each director was eligible for a Company match on total gifts up to $10,000 per calendar year. Amounts shown in the Director Compensation Table for matching grants may be in excess of $10,000 because such amounts include Company contributions on gifts that were made by directors in previous years
Governance highlights
| 2026 Notice of Annual Meeting & Proxy Statement | 27 |
Governance highlights
Director compensation consultant: The Committee retains Semler Brossy to assess trends and developments in director compensation practices and to compare IBM’s practices against them. The Committee uses the analysis prepared by the consultant as part of its periodic review of IBM’s director compensation practices. Other than services provided to IBM’s Directors and Corporate Governance Committee and IBM’s Executive Compensation and Management Resources Committee, Semler Brossy does not perform any other work for IBM. The Committee determined that Semler Brossy is free of conflicts of interest. 2025 Director compensation table
Governance highlights
| Name (a) | Fees earned or paid in cash ($) (b) | All other compensation ($) (c)(1) | Total ($) (d) | | Marianne C. Brown | $365,000 | $26,416 | $391,416 | | Thomas Buberl | 365,000 | 86,081 | 451,081 | | David N. Farr | 365,000 | 146,043 | 511,043 | | Alex Gorsky | 430,000 | 214,291 | 644,291 | | Michelle J. Howard | 365,000 | 100,704 | 465,704 | | Andrew N. Liveris | 390,000 | 279,935 | 669,935 | | F. William McNabb III | 365,000 | 98,009 | 463,009 | | Michael Miebach | 365,000 | 18,124 | 383,124 | | Martha E. Pollack | 365,000 | 115,522 | 480,522 | | Peter R. Voser | 400,000 | 202,016 | 602,016 | | Frederick H. Waddell | 390,000 | 156,576 | 546,576 | | Alfred W. Zollar | 365,000 | 55,078 | 420,078 |
Governance highlights
(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 473,395 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. (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 Savings Plan, and Company contributions into the IBM Stock Fund under the Excess Savings Plan. Some of these restricted stock units may have been deferred under the Excess Savings 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 2025 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, 2025, and (ii) RSU awards that vest within 60 days after December 31, 2025. For Mr. Cohn, Mr. Kavanaugh, Mr. Krishna, Ms. Robinson, and Mr. Thomas, shares in this column are from IBM restricted stock awards which will vest within 60 days after December 31, 2025. (4)Promised Fee Shares earned and accrued under the IBM Deferred Compensation and Equity Award Plan (DCEAP) as of December 31, 2025, 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 option (see Director Compensation section for additional information). (5)Values in this column are calculated by adding the number of shares shown in the “Common Stock” column to the number of shares shown in the “Directors’ DCEAP Shares” column (if applicable), and then multiplying the sum by the closing price of IBM common stock on the New York Stock Exchange on the last business day of the 2025 fiscal year ($296.21). (6)Voting and investment power are shared. (7)Includes 450 shares in which voting and investment power are shared. (8)Includes 143,364 shares in which voting and investment power are shared. (9)Includes 311,101 shares in which voting and investment power are shared. (10)Mr. Laguarta joined the Board on March 1, 2026. (12)The percentage of shares beneficially owned by all directors and executive officers of IBM as a group, which is the total of these three columns, does not exceed 1% of IBM’s outstanding shares, and no individual’s beneficial holdings totaled more than 1% of IBM’s outstanding shares.
Governance highlights
| | Page number | | 2025 Summary compensation table and related narrative | 48 | | 2025 Grants of plan-based awards table | 51 | | 2025 Outstanding equity awards at fiscal year-end table and related narrative | 52 | | 2025 Retention plan narrative | 54 | | 2025 Pension benefits narrative | 56 | | 2025 Nonqualified deferred compensation narrative | 61 | | 2025 Potential payments upon termination narrative | 64 | | Pay versus performance | 68 |
Governance highlights
| | Salary | | | Annual Incentive | | | Performance Share Units | | | Options | | | Restricted Stock Units | | | Performance-Based Pay (subject to rigorous performance goals and/or stock price performance) |
Governance highlights
For 2025 performance, the Board approved an annual incentive payment of $5,250,000 for Mr. Krishna, which was 150% of target. The payout reflects a 100% Individual Contribution Factor (ICF) and the Annual Incentive Program (AIP) pool funding score at 150%.
Governance highlights
| Target Incentive | | Individual Contribution Factor (ICF) | | Pool Funding Score | | Individual Payout |
CEO annual incentive award as % of target
CEO annual incentive award as % of target
Long-term performance share unit payouts as % of target
Long-term performance share unit payouts as % of target
Long-term performance share unit payouts as % of target
| 2026 Notice of Annual Meeting & Proxy Statement | 35 |
Long-term performance share unit payouts as % of target
Section 1: Executive compensation program design and results Trust and personal responsibility in all relationships — relationships with clients, partners, communities, fellow IBMers, and investors — is a core value at IBM. As a part of maintaining this trust, we well understand the need for our investors — not only professional fund managers and institutional investor groups, but also millions of individual investors — to know how and why compensation decisions are made.
Long-term performance share unit payouts as % of target
| To that end, IBM’s executive compensation practices are designed specifically to meet five key objectives: | | | •Align the interests of IBM’s leaders with those of our investors by varying compensation based on both long-term and annual business results and delivering a large portion of the total pay opportunity in IBM stock; •Balance rewards for both short-term results and the long-term strategic decisions needed to ensure sustained business performance over time; | •Attract and retain the highly qualified senior leaders needed to drive a global enterprise to succeed in today’s highly competitive marketplace; •Motivate our leaders to deliver a high degree of business performance without encouraging excessive risk taking; and •Differentiate rewards to reflect individual and team performance. |
Long-term performance share unit payouts as % of target
The specific elements of IBM’s current U.S. executive compensation programs are:
Long-term performance share unit payouts as % of target
| Type | Component | Key characteristics | | | Salary | Salary is a market-competitive, fixed level of compensation. | | Current year performance | | | | | Annual Incentive Program (AIP) | In addition to salary, annual incentive provides a market-competitive total cash opportunity at target. Actual annual incentive payments are funded by business performance against financial metrics and distributed based on annual performance scores, with top performers typically earning the greatest payouts and the lowest performers earning no incentive payouts. | | | Performance Share Units (PSUs) | | | Long-Term incentive | | Annual equity grants are based on competitive positioning and vary based on individual talent factors. For PSUs, the number of units granted can be increased or decreased at the end of the three-year performance period based on IBM’s performance against predetermined targets and a relative performance metric. | | | Restricted Stock Units (RSUs) | RSUs vest over time; typically ratably over four years. The final award value is based on IBM's stock price performance over the vesting period. | | | Stock Options (SOs) | Stock Options vest over time; typically ratably over four years. The exercise price is at least the value of the IBM stock price on the date of grant, and will be exercisable for up to 10 years from the date of grant. The final award value is based on IBM's stock price appreciation over the exercise price once vested and exercised. |
Long-term performance share unit payouts as % of target
Other compensation elements include perquisites, which are used on a limited basis primarily to ensure safety and productivity of executives, and retirement benefits. Full career performance: Retention, pension, and savings Periodically, awards may be made in the form of Retention Restricted Stock Units (RRSUs) or cash to help retain certain executives. Vesting of RRSUs typically range from two to five years and cash awards have a clawback if an executive leaves IBM before it is earned. Eligible U.S. employees may participate in post-employment savings plans such as the IBM 401(k) Plan, and a non-qualified deferred compensation plan. IBM provides a 5% matching contribution for all eligible employees in the non-qualified deferred compensation plan. The Company also provides a cash balance retirement benefit in the IBM Personal Pension Plan to all eligible employees equal to 5% of eligible pay.
Long-term performance share unit payouts as % of target
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Long-term performance share unit payouts as % of target
Our incentive compensation design supports our business strategy Our senior executive pay is heavily weighted to IBM’s performance through the annual and long-term incentive programs. Each year, the Committee ensures that these programs are closely aligned to the Company’s financial and strategic objectives and are appropriately balanced. Targets are set at challenging levels and are consistent with IBM’s financial model shared with investors for that year. As part of IBM’s ongoing management system, targets are evaluated to ensure they do not encourage an inappropriate amount of risk taking. To support the focus on delivering sustainable revenue growth and free cash flow as a hybrid cloud and AI company, the Committee updated the performance modifiers in our executive compensation programs as described below:
2025 Metrics and weightings
| Annual incentive program | | | | | Revenue | | Operating cash flow* | | | | Measures total revenue performance across the portfolio of business | | Measures our ability to reinvest and return value to stockholders | | Strategic Performance Scorecard (new in 2025): Talent and Innovation goals approved by the Compensation Committee annually that support IBM’s business and growth strategy. | | | |
2025 Metrics and weightings
| Performance share unit program | | | | | | | Revenue | | Operating earnings per share (EPS)* | | Free cash flow* | | | | Measures revenue performance over three years | | Measures operating profitability on a per share basis over three years | | Measures our ability to reinvest and return value to stockholders over three years | | ROIC Modifier* (pre-2025): Performance adjusted by a relative Return on Invested Capital Modifier. rTSR Modifier (new in 2025): Performance adjusted by IBM’s relative Total Shareholder Return (rTSR) to the S&P 500 Index. | | | | | |
2025 Metrics and weightings
* Non-GAAP financial metrics. See Appendix A for information on how we calculate these performance metrics. IBM shares its financial model each year with investors in the context of its long-term strategy. To provide further transparency, IBM discloses the performance attainment against financial targets for the most recent performance period, for both the Annual Incentive Program and the Performance Share Unit Program. 2025 Annual incentive program (AIP) How it works IBM sets business objectives at the beginning of each year, which are approved by the Board of Directors. The Compensation Committee and the Board of Directors review IBM’s annual business objectives and then set the metrics and weightings along with the Strategic Performance Scorecard initiatives for the AIP. These metrics translate to financial targets for IBM and for each business unit for purposes of determining the target funding of the AIP. In January, following the completion of the performance year, the Compensation Committee reviews the financial scoring, the Strategic Performance Scorecard results, any proposed qualitative adjustments, and then approves the final AIP pool funding level. Performance against the financial targets determines the total funding pool for the year, which can vary from 0% to 200% of the total target incentives for all executives. IBM performance is assessed against these predetermined financial targets, which are adjusted to remove any impact of currency movement, where applicable. The financial targets may be adjusted up or down for extraordinary events if recommended by the Chairman, President and CEO and approved by the Compensation Committee; for example, adjustments are usually made for large acquisitions and divestitures. For 2025, the Strategic Performance Scorecard included initiatives approved by the Compensation Committee in two categories, Talent and Innovation, which are key to IBM’s growth strategy. The Talent initiatives for 2025 included goals focused on employee engagement and talent retention. Innovation initiatives included goals focused on AI, Quantum, and Infrastructure. The scorecard can result in up to a 10 point reduction, no impact, or up to a 10 point increase to overall AIP
2025 Metrics and weightings
| Target Incentive | | Individual Contribution Factor (ICF) | | Pool Funding Score | | Individual Payout |
2025 Metrics and weightings
(1)Based on AIP payout table; the 2025 leveraged score resulted in 109% for revenue and 172% for operating cash flow; new in 2025 for both revenue and operating cash flow, threshold attainment is aligned at 80% with a 0% payout, target attainment and payout is 100%, maximum attainment is 110% with a 200% payout. (2)Revenue financial target is adjusted to remove the effects of currency changes. (3)Operating cash flow is a non-GAAP financial metric. See Appendix A for information on how we calculate this performance metric. Performance share unit (PSU) program The Performance Share Unit financial metrics for the 2023-2025 program were revenue, operating EPS, and free cash flow. Financial targets are established at the beginning of the three-year performance period. These targets are based on IBM’s financial model as shared with investors and the Board-approved business objectives. The PSU score is calculated as a weighted average of the results against the targets of revenue (40%), operating EPS (30%) and free cash flow (30%). The results adjust revenue for fluctuations in currency rates and operating EPS for any difference between actual and targeted share count. Additionally, the scoring for the PSU Program may consider extraordinary events. At the end of the three-year performance period, the Compensation Committee approves the results relative to the targets, which is leveraged up or down from 0% to 150%. The PSU Program for the 2023-2025 performance period also includes a Relative Return on Invested Capital (ROIC) modifier, which compares IBM’s performance to the median performance of the S&P 500 (excluding Financial Services) and the S&P 500 Information Technology indices over the three-year program period. The modifier increases the score linearly by 20 points when IBM’s performance exceeds the median of the S&P 500 Information Technology index. The modifier reduces the score linearly by 20 points when IBM’s performance falls below the median of the S&P 500 Index. If revenue, operating EPS, and free cash flow result in a 0% leveraged payout, the modifier does not apply. For the 2023-2025 program, the ROIC modifier was 0.
2025 Metrics and weightings
(1)Based on PSU payout levels displayed below. (2)Non-GAAP financial metric. See Appendix A for information on how we calculate this performance metric. (3)2023-2025 revenue as reported, adjusted for fluctuations in foreign currency. (4)Non-GAAP financial metrics. Operating EPS includes immaterial share adjustments in all three years. For 2023-2025, free cash flow amounts are on a consolidated basis. See Appendix A for information on how we calculate these performance metrics. 2023-2025 PSUs: Threshold, Target, and Max Attainment % and Payout %:
2025 Metrics and weightings
| | Threshold | Target | Max | | Financial metrics | Attainment % / Payout % | Attainment % / Payout % | Attainment % / Payout % | | Revenue (40%) | 70% / 25% | 100% / 100% | 120% / 150% | | Operating EPS (30%)(1) | 70% / 25% | 100% / 100% | 120% / 150% | | Free cash flow (30%)(1) | 70% / 25% | 100% / 100% | 120% / 150% |
Relative Total Shareholder Return Modifier (rTSR) - New for 2025
| What we do | | | | Tie a significant portion of pay to Company performance | | | Mitigate risk taking by emphasizing long-term equity incentives, placing caps on potential payments, and maintaining robust clawback provisions | | | Require significant share ownership by the Chairman, President and CEO, Vice Chairman and Senior Vice Presidents | | | Utilize noncompetition and nonsolicitation agreements for senior executives | | | Remove impact of share repurchase on executive incentives |
Relative Total Shareholder Return Modifier (rTSR) - New for 2025
| What we don’t do | | | | No individual severance or change-in-control agreements for executive officers | | | No excise tax gross-ups for executive officers | | | No dividend equivalents on unearned RSUs/PSUs | | | No hedging/pledging of IBM stock | | | No stock option repricing, exchanges or stock options granted below market value | | | No guaranteed incentive payouts for executive officers | | | No accelerated vesting of equity awards for executive officers | | | No above-market returns on deferred compensation plans |
Relative Total Shareholder Return Modifier (rTSR) - New for 2025
| | IBM Minimum requirement as a multiple of salary | Median peer group minimum requirement as a multiple of salary | | CEO | 10 | 7 | | Other NEOs | 7 | 4 |
Relative Total Shareholder Return Modifier (rTSR) - New for 2025
| What does not count | | | | Unvested equity awards | | | Unexercised stock options |
Approach to benchmarking
Approach to benchmarking IBM participates in several executive compensation surveys that provide general trend information and details on levels of salary, target annual incentives and long-term incentives, the relative mix of short- and long-term incentives, and mix of cash and stock-based pay. Given the battle for talent that exists in our industry, the benchmark companies that are used by the Compensation Committee to guide its decision making have included a broad range of key information technology companies, to help us identify trends in the industry. We also include companies outside our industry, with stature, size, and complexity that approximate our own, in recognition of the flow of executive talent in and out of IBM from other industries. The surveys and benchmark data are supplemented by input from the Compensation Committee’s outside consultant on factors such as recent market trends. The Committee reviews and approves this list annually.
Approach to benchmarking
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Approach to benchmarking
For 2025 compensation decisions, the Committee utilized the following benchmark group criteria: •Companies in the technology industry with revenue that exceeds $10 billion, plus •Additional companies in other industries, with revenue that exceeds $30 billion, and that have a global complexity similar to IBM, and whose business strategy results in substantial competition for senior leadership talent. For 2025 compensation decisions, the Committee approved the following benchmark group using the criteria above, which achieves a balance between prominent technology competitors and large-scale companies of similar size to IBM. In consideration of size and complexity, IBM’s philosophy is to generally target the 50th percentile of the market for cash and total compensation. Executives in new roles are typically positioned below and brought up to median with sustained performance, while high performing executives may have an above median target total pay opportunity driven by long-term incentives to retain executive skills and support strong succession plans.
Benchmark group
Benchmark group
Benchmark group
| Accenture | Boeing | Intel | Salesforce | | Adobe | Broadcom | Microsoft | UPS | | Alphabet | Cisco Systems | Oracle | Verizon | | Amazon.com | Elevance Health | PepsiCo | Visa | | AT&T | Hewlett Packard Enterprise | Qualcomm | | | Bank of America | Honeywell | RTX | |
Approach to determining individual compensation
Approach to determining individual compensation For individual compensation decisions, the benchmark information is used together with an internal view of individual performance relative to other executives and recognizing that the skills and experience of our senior executives are highly sought after by other companies and, in particular, by IBM’s competitors. Because factors such as performance and retention, as well as size and complexity of the job role, are considered when compensation decisions are made, the cash and total compensation for an individual named executive officer may be higher or lower than the target reference point of the benchmark group.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Section 3: Compensation decisions for the Chairman, President and CEO and named executive officers 2025 Annual incentive payment decision for the Chairman, President and CEO For 2025 performance, the Board approved an annual incentive payment of $5,250,000, which represented 150% of Mr. Krishna’s target opportunity and was in line with the Company's pool funding score. In addition to overall IBM 2025 revenue performance of $67.5 billion and $13.2 billion cash from operations, the Compensation Committee noted the following achievements for Mr. Krishna, which have positioned IBM for sustained growth going forward:
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name | 2025 Annual incentive payouts(1) | | | J.J. Kavanaugh | | $2,584,500 | | R.D. Thomas | | 2,370,000 | | G. Cohn | | 2,370,000 | | A. Robinson | | 2,068,500 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Section 4: Additional information Compensation program as it relates to risk IBM management, the Compensation Committee and the Committee’s outside consultant review IBM’s compensation policies and practices, with a focus on incentive programs, to ensure that they do not encourage excessive risk taking. This review includes the cash incentive programs and the long-term incentive plans that cover executives and employees. Based on this comprehensive review, we concluded that our compensation programs do not encourage excessive risk taking for the following reasons: •Our programs appropriately balance short- and long-term incentives, with approximately 78% of 2025 annual total target compensation provided in equity for the Chairman, President and CEO, Vice Chairman, and SVPs as a group. •Our executive compensation program pays for performance against financial targets that are set to be challenging to motivate a high degree of business performance, with an emphasis on longer-term financial success and prudent risk management. •Our incentive plans include a profit metric as a component of performance to promote disciplined progress toward financial goals. None of IBM’s incentive plans are based solely on signings or revenue targets, which mitigates the risk of employees focusing exclusively on the short term. •Qualitative factors beyond the quantitative financial metrics are a key consideration in the determination of individual executive compensation payments. How our executives achieve their financial results, integrate across lines of business and demonstrate leadership consistent with IBM values are key to individual compensation decisions. •As explained in the 2025 Potential Payments Upon Termination Narrative, we further strengthened our retirement policies on equity grants for our senior leaders beginning in 2009 to ensure that the long-term interests of IBM continue to be the focus, even as these executives approach retirement. •Our stock ownership guidelines require that the Chairman, President and CEO, Vice Chairman, and each SVP hold a significant amount of IBM equity to further align their interests with stockholders over the long term. •IBM’s policy requires a clawback of incentive-based compensation paid to an executive officer if there is a restatement of IBM’s financial results that would have affected the amount of incentive-based compensation, regardless of whether the executive officer’s conduct led to the restatement. Likewise, IBM’s equity plan has a clawback provision under which awards may be cancelled and certain gains repaid if an executive engages in activity that is detrimental to IBM. To further reinforce our commitment to ethical conduct, the IBM Excess Savings Plan allows the clawback of certain IBM contributions if a participant engages in activity that is detrimental to IBM. We are confident that our compensation program is aligned with the interests of our stockholders, rewards for performance and represents strong executive compensation governance practices. Equity award practices Under IBM’s long-standing practices and policies, all equity awards are approved before or on the date of grant. The exercise price of at-the-money Stock Options is the average of the high and low market price of IBM common stock on the New York Stock Exchange on the date of grant or as specified by the Compensation Committee. The equity award approval process specifies the individual receiving the grant, the number of units or the value of the award, the exercise price or formula for determining the exercise price, if different from the average of the high and low market price of IBM common stock on the New York Stock Exchange on the grant date, and the date of grant. In the case of planned grant value, the number of shares granted are determined by dividing the planned value by the average of IBM’s closing stock price for the 30 active trading days prior to grant reduced by the present value of expected dividends for PSUs and RSUs. For Stock Options, the average IBM closing stock price is further adjusted by an option valuation factor to reflect the discounted value of Stock Options compared to full value awards. As with all compensation decisions, the independent members of the Board approve all equity awards for the Chairman, President and CEO, and ratify all equity awards for the Chief Financial Officer. In addition, all equity awards for the Vice Chairman and each SVP are approved by the Compensation Committee. All equity awards for employees other than the Chairman, President and CEO, Vice Chairman and SVPs are approved by the Chairman, President and CEO, Vice Chairman and SVPs pursuant to a series of delegations that were approved by the Compensation Committee, and the grants made pursuant to these delegations are reviewed periodically with the Committee.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Equity awards granted as part of annual total compensation for senior leaders and other employees are made on specific cycle dates scheduled in advance, typically in the month of February. For officers, the February grant date is scheduled within one month of the Compensation Committee’s approval of any applicable equity awards (at the end of January). IBM’s policy for new hires and promotions requires approval of any awards before or on the grant date of the award. IBM does not have any plans, programs or agreements that would provide any payments to any of the named executive officers upon a change in control of IBM, a change in the named executive officer’s responsibilities or a constructive termination of the named executive officer. Ethical conduct Every executive is held accountable to comply with IBM’s high ethical standards: IBM’s Values, including “Trust and Personal Responsibility in All Relationships,” and IBM’s Business Conduct Guidelines. This responsibility is reflected in each executive’s performance goals, and is reinforced through each executive’s annual certification to the IBM Business Conduct Guidelines. An executive’s compensation, including annual cash incentive payments, is tied to compliance with these standards; compliance is also a condition of IBM employment for each executive. IBM’s equity plans and agreements have a clawback provision — awards may be cancelled and certain gains repaid if an executive engages in activity that is detrimental to IBM, such as violating IBM’s Business Conduct Guidelines, disclosing confidential information or performing services for a competitor. To further reinforce our commitment to ethical conduct, the Excess Savings Plan allows the clawback of certain IBM contributions if a participant engages in activity that is detrimental to IBM. In addition, approximately 1,700 of our key executives (including each of the named executive officers) have agreed to a noncompetition, nonsolicitation agreement that prevents them from working for certain competitors within 12 months of leaving IBM or soliciting employees after leaving IBM. The Committee has also adopted, in accordance with SEC and NYSE requirements, a policy to claw back incentive-based compensation from executive officers in the event of a restatement of IBM’s financial results. Hedging and pledging practices IBM has multiple corporate leadership teams, which includes senior executives in client facing roles, technical innovation roles or key leadership positions. An example is the Performance Team, which consists of approximately 85 of our most senior leaders who run IBM business units and geographies and includes the Chairman, President and CEO, Vice Chairman, and each SVP. The team is accountable for business performance and the development of cross-unit strategies. As provided in its insider trading policy, IBM does not allow any member of the IBM Board of Directors or any member of its corporate leadership teams, including any named executive officer, to hedge the economic risk of their ownership of any IBM securities, which includes entering into any derivative transaction on IBM stock (e.g., any short-sale, prepaid variable forward contract, equity swap, collars, exchange funds) or to pledge any IBM securities at any time, which includes having IBM stock in a margin account or using IBM stock as collateral for a loan. Further, IBM does not allow any employee granted equity awards through the IBM Long-Term Incentive Plan to hedge or pledge those securities. Tax considerations Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, limits deductibility of compensation in excess of $1 million paid to IBM’s covered employees. A “covered employee,” under Section 162(m) as amended, is the CEO, the CFO, the three highest paid executive officers, and any other individual who was a covered employee of the Company for the preceding tax years beginning after December 31, 2016. Although the tax deduction for performance-based compensation has been eliminated for awards after November 2, 2017, IBM continues to believe that a strong link between pay and performance is critical to align executive and stockholder interests. IBM and the Committee will continue to ensure that a significant portion of pay for our Vice Chairman and SVPs, including the Chairman, President and CEO, is at risk and subject to the attainment of performance goals.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name and principal position (a) Year (b) | Salary(1) ($) (c) | Bonus(2) ($) (d) | | Stock awards(3) ($) (e) | Option awards(4) ($) (f) | Non-equity incentive plan compensation(5) ($) (g) | | Change in retention plan value(6) ($) (h) | | Change in pension value(7) ($) (h) | | Nonqualified deferred compensation earnings(8) ($) (h) | | All other compensation (9)(10) ($) (i) | | Total(11) ($) (j) | | | A. Krishna, Chairman, President and CEO | | | | | | | | | | | | | | | | | | | 2025 | $1,500,000 | | $0 | $23,988,586 | $6,606,312 | | $5,250,000 | | N/A | | $42,970 | | $0 | | $601,817 | | $37,989,685 | | 2024 | 1,500,000 | | 0 | 14,827,724 | 4,499,742 | | 3,850,000 | | N/A | | 34,056 | | 0 | | 432,161 | | 25,143,682 | | 2023 | 1,500,000 | | 0 | 11,483,809 | 3,339,560 | | 3,510,000 | | N/A | | 23,183 | | 0 | | 541,874 | | 20,398,426 | | J.J. Kavanaugh, Senior VP, F&O & CFO | | | | | | | | | | | | | | | | | | | 2025 | $1,250,250 | | $0 | $11,514,830 | $3,171,079 | | $2,584,500 | | $3,543 | | $37,946 | | $0 | | $278,515 | | $18,840,663 | | 2024 | 1,151,500 | | 0 | 7,599,258 | 2,306,123 | | 1,738,000 | | 14,178 | | 29,909 | | 0 | | 170,435 | | 13,009,403 | | 2023 | 1,088,000 | | 0 | 6,704,515 | 1,949,711 | | 1,730,430 | | 0 | | 15,264 | | 0 | | 203,369 | | 11,691,289 | | R.D. Thomas, Senior VP, Software & Chief Commercial Officer | | | | | | | | | | | | | | | | | | | 2025 | $1,143,500 | | $0 | $10,794,920 | $2,972,892 | | $2,370,000 | | N/A | | $24,259 | | $0 | | $188,523 | | $17,494,094 | | 2024 | 1,048,000 | | 0 | 7,043,235 | 2,137,386 | | 1,866,800 | | N/A | | 19,461 | | 0 | | 168,516 | | 12,283,398 | | 2023 | 994,750 | | 0 | 5,843,417 | 1,699,249 | | 1,552,500 | | N/A | | 3,170 | | 0 | | 241,228 | | 10,334,314 | | G. Cohn, Vice Chairman | | | | | | | | | | | | | | | | | | | 2025 | $1,170,000 | | $0 | $9,835,230 | $2,708,592 | | $2,370,000 | | N/A | | $19,483 | | $0 | | $132,470 | | $16,235,775 | | 2024 | 1,170,000 | | 0 | 5,931,188 | 1,799,913 | | 1,738,000 | | N/A | | 18,032 | | 0 | | 154,388 | | 10,811,521 | | 2023 | 1,170,000 | | 0 | 4,897,686 | 1,424,239 | | 1,848,600 | | N/A | | N/A | | 0 | | 196,565 | | 9,537,090 | | A. Robinson, Senior VP & Chief Legal Officer(12) | | | | | | | | | | | | | | | | | | | 2025 | $999,500 | | $0 | $7,292,774 | $2,008,338 | | $2,068,500 | | N/A | | $16,503 | | $0 | | $70,695 | | $12,456,310 | | 2024 | 467,500 | | 750,000 | 6,841,641 | 1,090,629 | | 695,750 | | N/A | | N/A | | 0 | | 31,840 | | 9,877,360 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Note: For assumptions used in determining the fair value of stock and option awards, see Note A (Significant Accounting Policies — Stock-Based Compensation) and Note T (Stock-Based Compensation) to IBM’s 2025 Consolidated Financial Statements. (1)Amounts in this column reflect the actual salary amount paid to each named executive officer during 2025. (2)Ms. Robinson’s offer letter, signed in 2024, included a cash sign-on payment of $750,000. (3)Amounts in this column reflect the total Performance Share Units (PSUs) and Restricted Stock Units (RSUs). Amounts include the aggregate grant date fair values of PSUs at the Target number as set forth in 2025 Grants of Plan-Based Awards Table, calculated in accordance with accounting guidance, which includes using a Monte Carlo model to reflect the rTSR market‑based condition; these amounts reflect an adjustment for the exclusion of dividend equivalents. At the Maximum number, these values for Mr. Krishna would be: 2025: $40,495,832; 2024: $18,905,281; 2023: $14,641,833; for Mr. Kavanaugh: 2025: $19,438,389; 2024: $9,688,967; 2023: $8,548,269; for Mr. Thomas: 2025 $18,223,084; 2024: $8,980,071; 2023: $7,450,269; for Mr. Cohn: 2025: $16,603,218; 2024: $7,562,278; 2023: $6,244,427; and for Ms. Robinson: 2025: $12,310,926; 2024: $4,563,576. Amounts also include the aggregate grant date fair values of RSU and RRSU grants, if applicable, calculated in accordance with accounting guidance; these amounts reflect an adjustment for the exclusion of dividend equivalents. (4)This column reflects the grant date fair value of stock option grants, if applicable, calculated in accordance with accounting guidance. (5)Amounts in this column include payments under IBM’s Annual Incentive Program (AIP), in which all named executive officers participate. The performance period is the fiscal year (January 1 through December 31, 2025). As Ms. Robinson joined on July 1, 2024, her 2024 performance period is pro-rated to reflect July 1, 2024 through December 31, 2024. Mr. Krishna’s target was 233% of his 2025 base salary rate. All other named executive officers had an annual target of 135% of their 2025 salary rate. In the 2025 Grants of Plan-Based Awards Table, see column (c) for the Threshold payout ($0), column (d) for the Target payout, and column (e) for the Maximum payout. (6)Although accruals under the Retention Plan stopped on December 31, 2007, change in Retention Plan Value was due to increase in age, changes in the discount rate, interest crediting rate, and mortality table. Mr. Kavanaugh is the only eligible named executive officer in the Retention Plan. In 2023, his benefit resulted in a negative amount ($8,528). (7)Although accruals under the IBM Personal Pension Plan stopped on December 31, 2007, change in Pension Value for the eligible named executive officers was due to their age, changes in the discount rate, interest crediting rate, and mortality table. In addition, for 2024 and 2025, the change in Pension Value includes the Retirement Benefit Account retirement benefits for the eligible named executive officers. Assumptions can be found immediately after the 2025 Pension Benefits Table. (8)IBM does not provide above-market or preferential earnings on deferred compensation. See the 2025 Nonqualified Deferred Compensation Narrative for information about deferred compensation. (9)Amounts in this column include the following for 2025: for Mr. Krishna: tax reimbursements of $44,337 and IBM contributions to defined contribution plans of $250,000; for Mr. Kavanaugh: IBM contributions to defined contribution plans of $131,913; for Mr. Thomas: tax reimbursements of $43,262 and IBM contributions to defined contribution plans of $116,210; and for Mr. Cohn: IBM contributions to defined contribution plans of $127,900. See the 2025 Summary Compensation Table Narrative below for a description and information about these items. (10)Amounts in this column also include the following perquisites for 2025: for Mr. Krishna: personal financial planning, ground transportation, family attendance at business-related events of $46,118, personal travel on company aircraft of $138,651, personal security of $72,767, and other personal expenses; for Mr. Kavanaugh: personal financial planning, annual executive physical, family attendance at business-related events, personal travel on company aircraft of $120,367, and other personal expenses; for Mr. Thomas: ground transportation, family attendance at business related events of $25,815, and other personal expenses; and for Ms. Robinson: personal financial planning, personal travel on company aircraft of $36,567, ground transportation, annual executive physical, family attendance at company related events, and other personal expenses. See the 2025 Summary Compensation Table Narrative below for a description and information about the aggregate incremental cost calculations for perquisites. (11)Amounts in this column reflect the total of the following columns: Salary, Bonus, Stock Awards, Option Awards, Non-Equity Incentive Plan Compensation, Change in Retention Plan Value, Change in Pension Value, Nonqualified Deferred Compensation Earnings and All Other Compensation. (12)Ms. Robinson was not a named executive officer in the 2024 Proxy Statement; therefore, 2023 data is excluded for her.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 48 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
2025 Summary compensation table narrative — all other compensation (Column (i)) Amounts in this column represent the following as applicable: Tax reimbursements •Payments by IBM to the named executive officers to cover taxes incurred for certain business-related taxable expenses, which may include: cost of family travel to/from and attendance at business-related events, business-related local lodging and incidental expenses, and business-related ground transportation expenses (see Ground Transportation below). IBM Contributions to defined contribution plans •IBM contributions to the individual accounts for each named executive officer under the Excess Savings Plan, and for the IBM 401(k) Plan for year 2023. •See the 2025 Nonqualified Deferred Compensation Narrative for additional details on the nonqualified deferred compensation plan. Perquisites The following describes perquisites (and their aggregate incremental cost calculations) provided to the named executive officers in 2025: Personal financial planning •In 2025, IBM offered financial planning services with coverage generally up to $15,000 annually for senior U.S. executives, including each named executive officer. Personal travel on company aircraft General information •Amounts represent the aggregate incremental cost to IBM for travel not directly related to IBM business. •IBM’s security practices provide that all air travel by the Chairman, President and CEO, including personal travel, be on Company aircraft. IBM’s security practices for air travel are consistent with best practices as assessed by independent third-party security experts. •The aggregate incremental cost for Mr. Krishna’s personal travel, including any aggregate incremental cost of travel by family members or other guests on both business and non-business occasions, is included in column (i) of the 2025 Summary Compensation Table. •Additionally, personal travel or commutation in 2025 on Company aircraft by named executive officers other than Mr. Krishna, and the aggregate incremental cost, if any, of travel by the officer’s family or other guests when accompanying the officer on both business and non-business occasions is also included. •Also, from time to time, named executive officers who are members of the boards of directors of certain other companies and non-profit organizations travel on Company aircraft to those outside board meetings. These amounts may include travel related to participation on these outside boards. •Any aircraft travel by named executive officers for an annual executive physical under the corporate wellness program is included in these amounts. Aggregate incremental cost calculation •The aggregate incremental cost for the use of Company aircraft for personal travel, including travel to outside boards, is calculated by dividing (i) the total variable costs for all IBM owned, IBM leased and charter aircrafts across all trips taken by (ii) total flight hours, to obtain a variable cost per hour. Total variable costs include fuel, maintenance, landing fees, crew variable expenses, and catering, as well as any comparable costs incurred when a charter aircraft is used. •This variable cost per hour is then multiplied by the total number of personal flight hours, including deadhead legs (i.e., empty flights to and from the IBM hangar or any other location), regardless of the type of aircraft flown or trip type.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 49 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Ground transportation •IBM’s security practices provide that the Chairman, President and CEO be driven to and from work by IBM personnel in a car leased by IBM or by an authorized car service. Additionally, the Chairman, President and CEO and his family may use a Company-leased car with an IBM driver or an authorized car service for non-business occasions. •Other named executive officers may use a Company-leased car with an IBM driver or an authorized car service for business-related transportation, and travel to outside board meetings and an annual executive physical under IBM’s corporate wellness program. Family members and other guests may accompany these named executive officers in a Company-leased car with an IBM driver or an authorized car service on these occasions. •Amounts reflect the aggregate incremental cost, if any, for the above-referenced items. Aggregate incremental cost calculation •For the Company-leased car with an IBM driver, incremental cost is calculated by multiplying the variable rate by the applicable driving time. The variable rate includes a driver’s salary and overtime payments, plus a cost per mile calculation based on fuel and maintenance expense. •For an authorized car service, the incremental cost is the full cost to IBM for such service. Personal security General information •Under IBM’s security practices, IBM provides security personnel for the Chairman, President and CEO and his family on certain business and non-business occasions. •Amounts include the aggregate incremental cost, if any, of security personnel for those occasions. •In addition, amounts also include the cost of home security systems and monitoring for the Chairman, President and CEO, and any other named executive officers, if applicable. Aggregate incremental cost calculation •The aggregate incremental cost for security personnel is the cost of any commercial airfare to and from the destination, hotels, meals, car services, and salary and travel expenses of any additional subcontracted personnel if needed. •The aggregate incremental cost for installation, maintenance, and monitoring services for home security systems reflects the full cost to IBM for these items. Annual executive physical •Amounts represent any payments by IBM for the cost of an annual executive physical for the named executive officers under IBM’s corporate wellness program, if applicable. Family travel and attendance at business-related events •Amounts represent the aggregate incremental cost, if any, of travel and/or meals and entertainment for the family members of the named executive officers to attend business-related events, such as meetings, dinners, and receptions with IBM’s clients, executive management, or board members. Other personal expenses •Amounts represent the cost of meals and lodging for the named executive officers who traveled for their annual executive physical under IBM’s corporate wellness program. •Amounts also include expenses associated with participation on outside boards other than those disclosed as Personal Travel on Company Aircraft and Ground Transportation. •Amounts also include items relating to business events and administrative charges incurred by executives.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 50 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
2025 Grants of plan-based awards table
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name (a) Type of award(1) | Grant date (b) | Compensation committee approval date | Estimated future payouts under non-equity incentive plan awards | | | Estimated future payouts under equity incentive plan awards(2) | | | All other stock awards: Number of shares of stock or units(3) (#) (i) | All other option awards: Number of securities underlying options(3) (#) (j) | Exercise or base price of option awards(4) ($/Sh) (k) | Closing price on the NYSE on the date of grant ($/Sh) | Grant date fair value of stock and option awards(5) ($) (l) | | | | | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | | | | | | | A. Krishna | | | | | | | | | | | | | | | AIP | N/A | | $0 | $3,500,000 | $7,000,000 | | | | | | | | | | PSU | 2/18/2025 | 1/27/2025 | | | | 13,595 | 67,976 | 149,547 | | | | | $18,407,221 | | RSU | 2/18/2025 | 1/27/2025 | | | | | | | 22,659 | | | | 5,581,365 | | SO | 2/18/2025 | 1/27/2025 | | | | | | | | 90,634 | $261.89 | $263.49 | 6,606,312 | | J.J. Kavanaugh | | | | | | | | | | | | | | | AIP | N/A | | 0 | 1,723,000 | 5,169,000 | | | | | | | | | | PSU | 2/18/2025 | 1/27/2025 | | | | 6,526 | 32,629 | 71,784 | | | | | 8,835,607 | | RSU | 2/18/2025 | 1/27/2025 | | | | | | | 10,877 | | | | 2,679,223 | | SO | 2/18/2025 | 1/27/2025 | | | | | | | | 43,505 | 261.89 | 263.49 | 3,171,079 | | R.D. Thomas | | | | | | | | | | | | | | | AIP | N/A | | 0 | 1,580,000 | 4,740,000 | | | | | | | | | | PSU | 2/18/2025 | 1/27/2025 | | | | 6,118 | 30,589 | 67,296 | | | | | 8,283,195 | | RSU | 2/18/2025 | 1/27/2025 | | | | | | | 10,197 | | | | 2,511,725 | | SO | 2/18/2025 | 1/27/2025 | | | | | | | | 40,786 | 261.89 | 263.49 | 2,972,892 | | G. Cohn | | | | | | | | | | | | | | | AIP | N/A | | 0 | 1,580,000 | 4,740,000 | | | | | | | | | | PSU | 2/18/2025 | 1/27/2025 | | | | 5,574 | 27,870 | 61,314 | | | | | 7,546,917 | | RSU | 2/18/2025 | 1/27/2025 | | | | | | | 9,290 | | | | 2,288,313 | | SO | 2/18/2025 | 1/27/2025 | | | | | | | | 37,160 | 261.89 | 263.49 | 2,708,592 | | A. Robinson | | | | | | | | | | | | | | | AIP | N/A | | 0 | 1,379,000 | 4,137,000 | | | | | | | | | | PSU | 2/18/2025 | 1/27/2025 | | | | 4,133 | 20,665 | 45,463 | | | | | 5,595,875 | | RSU | 2/18/2025 | 1/27/2025 | | | | | | | 6,889 | | | | 1,696,898 | | SO | 2/18/2025 | 1/27/2025 | | | | | | | | 27,553 | 261.89 | 263.49 | 2,008,338 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
(1)Type of Award: AIP = Annual Incentive Program PSU = Performance Share Unit RSU = Restricted Stock Unit SO = Stock Option Each of these awards, except the non-equity incentive plan award, was granted under IBM’s 1999 Long-Term Performance Plan (LTPP). See the 2025 Summary Compensation Table for additional information on these types of awards. (2)2025 PSU awards will be adjusted based on performance period January 1, 2025 to December 31, 2027 and paid in February 2028. (3)The first tranche of the RSU and SO awards vested 25% on February 18, 2026 for all of the named executive officers. The remaining tranches will vest February 18, 2027, February 18, 2028, and February 18, 2029, provided that in each case, the named executive officer is an employee of IBM as of those dates unless they meet certain requirements to be eligible for continued vesting. See 2025 Potential Payments Upon Termination Narrative for a description of these eligibility requirements. (4)All SOs have an exercise price equal to the average of the high and low prices of IBM common stock on the New York Stock Exchange (NYSE) as of the grant date. (5)The amounts in this column reflect the aggregate grant date fair values of PSU, RSU, and SO awards calculated in accordance with accounting guidance. The values shown for the PSU awards are based on the Target number, as described in the 2025 Summary Compensation Table. The values shown for the PSUs, RSUs, and SO awards reflect an adjustment for the exclusion of dividend equivalents.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 51 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Option awards (Columns (b) – (f)) General terms •In accordance with IBM’s Long-Term Performance Plan (LTPP), the exercise price of stock options is not less than the average of the high and low prices of IBM common stock on the New York Stock Exchange (NYSE) on the date of grant. •IBM has not granted any option awards that are Equity Incentive Plan Awards. Stock awards (Columns (g) – (j)) Number of shares or units of stock that have not vested (Column (g)) The amounts in this column are the number of RSUs that were outstanding as of December 31, 2025. Market value of shares or units of stock that have not vested (Column (h)) The amounts in this column are the value of the RSU awards disclosed in column (g), calculated by multiplying the number of units by the closing price of IBM common stock on the New York Stock Exchange on the last business day of the 2025 fiscal year ($296.21). Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (Column (i)) The amounts in this column are the number of PSUs that were outstanding as of December 31, 2025. Performance share units •Amounts in column (i) reflect the Target number for each PSU award. •The performance criteria for IBM PSUs are based on cumulative three-year rolling targets. Therefore, measuring annual performance against these targets is not meaningful. •See Section 1 of the 2025 Compensation Discussion and Analysis, as well as the 2025 Summary Compensation Table, for a detailed description of the PSU program, including payout calculations. •The table below provides the payout levels for all outstanding PSU awards for each of the named executive officers. For 2024, the Maximum number of PSUs earned is 170% of the Target number based on business objectives (inclusive of an additional 20 points based on the relative ROIC modifier for the relevant performance period). For 2025, the Maximum number of PSUs earned is 220% of the Target number based on business objectives (inclusive of an additional 20 points based on the rTSR modifier for the relevant performance period). 2025 Outstanding PSU award payout levels
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name | Grant date | Threshold | Target | Maximum | | A. Krishna | 2/21/2024 | 16,841 | 67,362 | 114,515 | | | 2/18/2025 | 13,595 | 67,976 | 149,547 | | J.J. Kavanaugh | 2/21/2024 | 8,631 | 34,523 | 58,689 | | | 2/18/2025 | 6,526 | 32,629 | 71,784 | | R.D. Thomas | 2/21/2024 | 7,999 | 31,997 | 54,395 | | | 2/18/2025 | 6,118 | 30,589 | 67,296 | | G. Cohn | 2/21/2024 | 6,736 | 26,945 | 45,807 | | | 2/18/2025 | 5,574 | 27,870 | 61,314 | | A. Robinson | 7/1/2024 | 2,118 | 8,472 | 14,402 | | | 2/18/2025 | 4,133 | 20,665 | 45,463 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 52 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested (Column (j)) The amounts in this column are the values of PSU awards disclosed in column (i), calculated by multiplying the number of units by the closing price of IBM common stock on the New York Stock Exchange on the last business day of the 2025 fiscal year ($296.21). 2025 Outstanding equity awards at fiscal year-end table
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| | Option awards | | | | | Stock awards | | | | | | | | | Name (a) Grant date | Number of securities underlying unexercised options (#) Exercisable (b) | Number of securities underlying options (#) Unexercisable(1) (c) | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) (d) | Option exercise price(2) ($) (e) | Option expiration date (f) | Type of award | Grant date | Number of shares or units that have not vested(3) (#) (g) | Market value of shares or units that have not vested(4) ($) (h) | Type of award | Grant date | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested(5) (#) (i) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested(4) ($) (j) | | A. Krishna | | | | | | | | | | | | | | | 02/21/22 | 108,402 | 36,135 | N/A | $124.51 | 02/20/32 | RSU | 02/21/22 | 5,166 | $1,530,221 | PSU | 02/21/24 | 67,362 | $19,953,298 | | 02/21/23 | 73,461 | 73,462 | N/A | 133.00 | 02/20/33 | RSU | 02/21/23 | 12,246 | 3,627,388 | PSU | 02/18/25 | 67,976 | 20,135,171 | | 02/21/24 | 28,067 | 84,202 | N/A | 180.87 | 02/20/34 | RSU | 02/21/24 | 16,841 | 4,988,473 | | | | | | 02/18/25 | 0 | 90,634 | N/A | 261.89 | 02/17/35 | RSU | 02/18/25 | 22,659 | 6,711,822 | | | | | | Total | 209,930 | 284,433 | | | | | | 56,912 | $16,857,904 | | | 135,338 | $40,088,469 | | J.J. Kavanaugh | | | | | | | | | | | | | | | 02/21/22 | 70,954 | 23,652 | N/A | $124.51 | 02/20/32 | RSU | 02/21/22 | 3,380 | $1,001,190 | PSU | 02/21/24 | 34,523 | $10,226,058 | | 02/21/23 | 42,888 | 42,889 | N/A | 133.00 | 02/20/33 | RSU | 02/21/23 | 7,150 | 2,117,902 | PSU | 02/18/25 | 32,629 | 9,665,036 | | 02/21/24 | 14,384 | 43,154 | N/A | 180.87 | 02/20/34 | RSU | 02/21/24 | 8,631 | 2,556,589 | | | | | | 02/18/25 | 0 | 43,505 | N/A | 261.89 | 02/17/35 | RSU | 02/18/25 | 10,877 | 3,221,876 | | | | | | Total | 128,226 | 153,200 | | | | | | 30,038 | $8,897,556 | | | 67,152 | $19,891,094 | | R.D. Thomas | | | | | | | | | | | | | | | 02/21/22 | 55,187 | 18,396 | N/A | $124.51 | 02/20/32 | RSU | 02/21/22 | 2,631 | $779,329 | PSU | 02/21/24 | 31,997 | $9,477,831 | | 02/21/23 | 37,379 | 37,379 | N/A | 133.00 | 02/20/33 | RSU | 02/21/23 | 6,232 | 1,845,981 | PSU | 02/18/25 | 30,589 | 9,060,768 | | 02/21/24 | 13,332 | 39,996 | N/A | 180.87 | 02/20/34 | RSU | 02/21/24 | 8,000 | 2,369,680 | | | | | | 02/18/25 | 0 | 40,786 | N/A | 261.89 | 02/17/35 | RSU | 02/18/25 | 10,197 | 3,020,453 | | | | | | Total | 105,898 | 136,557 | | | | | | 27,060 | $8,015,443 | | | 62,586 | $18,538,599 | | G. Cohn | | | | | | | | | | | | | | | 02/21/22 | 57,158 | 19,053 | N/A | $124.51 | 02/20/32 | RSU | 02/21/22 | 2,725 | $807,172 | PSU | 02/21/24 | 26,945 | $7,981,378 | | 02/21/23 | 31,329 | 31,330 | N/A | 133.00 | 02/20/33 | RSU | 02/21/23 | 5,223 | 1,547,105 | PSU | 02/18/25 | 27,870 | 8,255,373 | | 02/21/24 | 11,227 | 33,681 | N/A | 180.87 | 02/20/34 | RSU | 02/21/24 | 6,737 | 1,995,567 | | | | | | 02/18/25 | 0 | 37,160 | N/A | 261.89 | 02/17/35 | RSU | 02/18/25 | 9,290 | 2,751,791 | | | | | | Total | 99,714 | 121,224 | | | | | | 23,975 | $7,101,635 | | | 54,815 | $16,236,751 | | A. Robinson | | | | | | | | | | | | | | | 07/01/24 | 7,060 | 21,180 | N/A | $174.94 | 06/30/34 | RSU | 07/01/24 | 4,236 | $1,254,746 | PSU | 07/01/24 | 8,472 | $2,509,491 | | 02/18/25 | 0 | 27,553 | N/A | 261.89 | 02/17/35 | RRSU | 07/01/24 | 11,767 | 3,485,503 | PSU | 02/18/25 | 20,665 | 6,121,180 | | | | | | | | RSU | 02/18/25 | 6,889 | 2,040,591 | | | | | | Total | 7,060 | 48,733 | | | | | | 22,892 | $6,780,839 | | | 29,137 | $8,630,671 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Type of Award: PSU = Performance Share Unit RSU = Restricted Stock Unit RRSU = Retention Restricted Stock Units SO = Stock Option (1)The stock option awards granted vest 25% per year on the first through fourth anniversaries of the respective grant dates, provided the individual remains employed through each vesting date, unless they meet certain requirements to be eligible for continued vesting. (2)The exercise prices shown in this column are equal to the average of the high and low prices of IBM common stock on the New York Stock Exchange as of the grant date. (3)The amounts shown in column (g) of the 2025 Outstanding Equity Awards at Fiscal Year-End Table are unvested RSU and RRSU awards. See the 2025 Compensation Discussion and Analysis and the 2025 Summary Compensation Table for additional information on these types of awards. In 2021, 2022, 2023 and 2024 each named executive officer other than Ms. Robinson received RSU awards that vest 25% per year on the first through the fourth anniversaries of the respective grant date. In 2025, all named executive officers received RSUs that vest 25% per year on the first through the fourth anniversaries of the date of grant. Ms. Robinson was hired July 1, 2024, and granted RRSUs on such date, and her RRSU award vests 42% on the first anniversary of the grant date, and 29% vests on each of the second and third anniversaries of the grant date. (4)Values in these columns are calculated by multiplying the number of units by the closing price of IBM common stock on the New York Stock Exchange on the last business day of the 2025 fiscal year ($296.21). (5)The amounts shown in column (i) of the 2025 Outstanding Equity Awards at Fiscal Year-End Table are PSU awards that have not yet vested. See the 2025 Compensation Discussion and Analysis and the Summary Compensation Table Narrative for additional information on PSU awards. PSUs for all named executive officers are paid out in February following the end of the respective three-year performance period.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 53 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
2025 Option exercises and stock vested table
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| | Option awards | | | Stock awards(1) | | | | Name (a) | Number of shares acquired on exercise (#) (b) | Value realized on exercise ($) (c) | | Number of shares acquired on vesting (#) (d) | Value realized on vesting ($) (e) | | | A. Krishna | 0 | | $0 | 108,533 | | $31,350,617 | | J.J. Kavanaugh | 0 | | 0 | 63,469 | | 18,331,635 | | R.D. Thomas | 0 | | 0 | 68,814 | | 19,383,848 | | G. Cohn | 0 | | 0 | 48,103 | | 13,617,196 | | A. Robinson | 0 | | 0 | 16,555 | | 4,866,750 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
(1)Amounts shown in these columns reflect PSU, RSU, and RRSU awards that vested during 2025. The PSU award for the 2023-2025 performance period vested on December 31, 2025, and paid out to each named executive officer on February 1, 2026; the value of the PSU awards was determined by multiplying the number of shares by the closing price of IBM common stock on the vesting date ($296.21). The value of the RSU and RRSU awards was determined by multiplying the number of shares by the release price at the time of vesting. See the Compensation Discussion and Analysis and the 2025 Summary Compensation Table for details on these types of awards. Equity award grant practices As discussed in the Compensation Discussion and Analysis, equity awards, including stock option awards, granted as part of annual total compensation for senior leaders and other employees, are approved by the Compensation Committee on or before the grant date. The Compensation Committee’s general practice is to complete its annual executive compensation review and determine performance goals and target compensation for our NEOs, following which they approve equity awards for NEOs as well as any other stock option award recipients. Such equity awards are then granted during the Company’s annual executive equity award grant period, typically in February, which the Compensation Committee believes is a sufficient amount of time for the public markets to absorb our fiscal year-end financial results. On occasion, the Compensation Committee may grant equity awards outside of our annual grant cycle for new hires, promotions, recognition, retention, or other purposes. While the Compensation Committee has discretionary authority to grant equity awards outside of the cycle described above, it does not have a practice or policy of granting equity awards in anticipation of the release of material non-public information and, in any event, we do not time the release of material non-public information in coordination with grants of equity awards in a manner that intentionally affects the value of executive compensation. 2025 Retention plan narrative General description and purpose During the mid-1990s, the “IBM Supplemental Executive Retention Plan” (Retention Plan) was created to help retain the caliber of senior leaders needed to turn IBM around, preserve its long-term viability and position it for growth in the future. The Retention Plan is a nonqualified deferred compensation plan, which is unfunded, that provides for payment of an annual benefit if the participant satisfies the age, service, pay, and job level requirements. The Retention Plan is a U.S. Plan and eligibility is based on U.S. employment. Mr. Kavanaugh is eligible for a Retention Plan benefit. The Retention Plan was closed to new participants effective May 1, 2004, and future accruals stopped on December 31, 2007. Effective July 1, 1999, the Retention Plan was amended to provide a new benefit formula, but allowed participants who met certain age, service, and pay level conditions as of June 30, 1999, to continue to earn benefits under the prior formula if it provides a greater benefit. Retention Plan benefits are subject to forfeiture and rescission if an executive is terminated for cause or engages in competitive or other activity detrimental to IBM during or following employment. The Retention Plan is separately presented in the 2025 Retention Plan Table and is not included in the 2025 Pension Benefits Table.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 54 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
2025 Retention plan narrative Material terms and conditions: 1995 retention plan •The Retention Plan benefit for Mr. Kavanaugh is determined under the Retention Plan formula in effect prior to the July 1, 1999 amendment (1995 Retention Plan). •Benefits are available under the 1995 Retention Plan if at the time a participant separates from service they meet the early retirement age and service requirement, holds an executive-level position immediately prior to separation from service, and has final average pay of at least $160,000. •While Mr. Kavanaugh’s benefit is determined under the 1995 Retention Plan, he was partially grandfathered under this formula which means that his accruals stopped December 31, 2003 and the threshold to determine his benefit is $233,400 instead of $311,400 for fully grandfathered participants. If Mr. Kavanaugh terminates employment on or after age 60, his Retention Plan benefit expressed as an annual single life annuity is equal to: (1) 1.7% times final average pay up to (and including) $233,400 times years of service up to (and including) 20 years; plus (2) 2.55% times final average pay in excess of $233,400 times years of service up to (and including) 20 years; plus (3) 1.3% times final average pay times years of service in excess of 20, but not in excess of 30 years; plus (4) .75% times final average pay times years of service in excess of 30, but not in excess of 35 years; minus (5) the annual single life annuity that would be provided under the IBM Personal Pension Plan beginning on the benefit commencement date. •If the participant terminates employment before age 60, the annual single life annuity resulting from the sum of the amounts specified in (1) through (4) is reduced as specified in the Retention Plan. Compensation elements included in calculations •The definitions of eligible final average pay and eligible compensation for purposes of the Retention Plan have the same meanings as under the Pension Credit Formula in the IBM Personal Pension Plan. Available forms of payment •A participant’s benefit is only payable in the form of an annuity with monthly benefit payments beginning on the first day of the month following separation from service (subject to a six-month delay for “specified employees” as required under tax law). Annual retention plan benefit •The annual Retention Plan benefit that was earned as of December 31, 2007 and that is payable as a single life annuity beginning at the earliest unreduced retirement age (as defined in the next subsection) for Mr. Kavanaugh is detailed in the table below.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name | Annual retention plan benefit at earliest unreduced retirement age | | J.J. Kavanaugh | $10,637 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Present value of accumulated benefit •The present value of accumulated benefit shown in the 2025 Retention Plan Table below is the value as of December 31, 2025 of the annual Retention Plan benefit that was earned as of December 31, 2007. •The assumptions used to determine the present value of the annual accumulated Retention Plan benefit payable beginning at the earliest unreduced retirement age are described immediately following the 2025 Pension Benefits Table. 2025 Retention plan table
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name (a) | Plan name (b) | Number of years credited service(1) (#) (c) | Present value of accumulated benefit(2) ($) (d) | Payments during last fiscal year ($) (e) | | J.J. Kavanaugh | Retention Plan | 12 | $148,831 | $0 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
(1)Reflects years of credited service as of December 31, 2007. Mr. Kavanaugh has 18 additional years of service with IBM after that date. (2)For assumptions used to calculate the present value, see the “Assumptions used to determine present value as of December 31, 2025” immediately following the 2025 Pension Benefits Table.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 55 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
The 2025 Pension Benefits Tables show the number of years of credited service, present value of accumulated benefit and payments during the last fiscal year for each named executive officer under the IBM U.S. defined benefit pension plan. U.S. Qualified plan and nonqualified plan descriptions — general The IBM Personal Pension Plan consists of a tax-qualified plan and a non-tax qualified plan. Effective January 1, 2008, the non-tax qualified plan was renamed the IBM Excess Personal Pension Plan and is referred to herein as the Nonqualified Plan. The tax-qualified plan consists of three different benefits, (i) (a) pension credit formula benefit and (b) cash-balance benefit, both of which are available only to participants hired prior to January 1, 2005, and under which accruals ceased as of December 31, 2007 (the Prior Plan); and (ii) effective January 1, 2024, a new cash-balance benefit called the Retirement Benefit Account (RBA) for all eligible employees. The tax qualified plan is referred to as the Qualified Plan. The combined plan is referred to herein as the IBM Personal Pension Plan. Plan description •The Qualified Plan provides funded, tax-qualified benefits up to the limits on compensation and benefits under the Internal Revenue Code. •The Nonqualified Plan provides unfunded, nonqualified benefits in excess of the limits on compensation. •Accrual of future benefits under the Prior Plan and the Nonqualified Plan stopped on December 31, 2007, and a participant’s pension benefit does not consider pay earned and service credited after such date. Accrual of future benefits under the RBA is ongoing. IBM U.S. Personal pension plan (qualified plan) Purpose of the qualified plan •The Prior Plan was designed to provide tax-qualified pension benefits that were generally available to all U.S. regular employees prior to January 1, 2005. The RBA was designed to provide tax-qualified pension benefits generally available to all U.S. regular employees effective January 1, 2024 who had at least one year of service. •The benefits under the Prior Plan are determined either under the Pension Credit Formula (for those who met certain eligibility criteria in 1999) or the Personal Pension Account described below. As the named executive officers’ benefits under the Prior Plan are determined under the Personal Pension Account formula, this disclosure will only address the material terms of such formula under the Prior Plan as well as the RBA. Material terms and conditions: Personal pension account formula •Messrs. Krishna’s, Kavanaugh’s, and Thomas’ benefit under the Qualified Plan is determined under the Personal Pension Account formula, a cash balance formula. •Under the Personal Pension Account formula prior to 2008, the eligible named executive officers receive pay credits and interest credits to their respective Personal Pension Accounts. The pay credits for the year were equal to 5% of the eligible named executive officers’ eligible compensation for that year. The interest credits are based on the annual interest rate on one-year Treasury Constant Maturities plus 1%. Further, the eligible named executive officers may receive their benefit under the Personal Pension Account formula at any time following termination of employment but may not defer the commencement of the benefit later than normal retirement age. If the eligible named executive officers’ benefit begins to be paid before normal retirement age, it will be reduced when compared to the benefit that would commence at normal retirement age. The eligible named executive officers may receive their benefit in either a lump sum equal to the Personal Pension Account balance, an annuity that is actuarially equivalent to the Personal Pension Account balance, or both a partial lump sum and a reduced annuity.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 56 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Material terms and conditions: Retirement benefit account formula under the qualified plan •All of the named executive officers are eligible for a benefit under the RBA, a cash balance formula. •Under the RBA formula effective January 1, 2024, the eligible named executive officers receive pay credits and interest credits to their respective RBA accounts. The pay credits for a year were equal to 5% of the eligible named executive officer’s eligible compensation for that year. The interest credits for 2025 are 6%. Further, the eligible named executive officers may receive their RBA benefit any time following termination of employment, but may not defer the commencement of the benefit later than normal retirement age. If the eligible named executive officers’ benefit begins to be paid before normal retirement age, it will be reduced when compared to the benefit that would commence at normal retirement age. The eligible named executive officers may receive their benefit in either a lump sum equal to the RBA balance, or an annuity that is actuarially equivalent to the RBA balance. Compensation elements included in calculations •For the Prior Plan before 2008, eligible compensation was generally equal to the total amount that is included in income including: •Salary; •Recurring payments under any form of variable compensation plan (excluding equity awards); and •Amounts deducted from salary and variable compensation under IBM’s Internal Revenue Code Section 125 plan (cafeteria plan), and amounts deferred under IBM’s 401(k) Plan and Excess Savings Plan. •Compensation for a year was limited to the compensation limit under the Internal Revenue Code, which for the last year that benefits accrued under the Prior Plan, was $225,000. In addition, benefits provided under the Qualified Plan may not exceed an annual benefit limit under the Internal Revenue Code (which in 2025 was $280,000 payable as an annual single life annuity beginning at normal retirement age). For the RBA, eligible compensation is generally equal to the total amount of: •Salary •Recurring payment under any form of variable compensation (excluding equity awards) and •Amounts deducted from salary and variable compensation under IBM’s Internal Revenue Code Section 125 plan (cafeteria plan) and amounts deferred under IBM’s 401(k) Plan and Excess Savings Plan. IBM U.S. Excess personal pension plan (Nonqualified Plan) Purpose of the nonqualified plan •The Nonqualified Plan provides Prior Plan participants with benefits that may not be provided under the Prior Plan because of the tax limits on eligible compensation. •The benefit provided to a participant is payable following a separation from service from IBM (subject to the six-month delay for “specified employees” as required under tax law). Material terms and conditions of the nonqualified plan •The Nonqualified Plan provides a benefit equal to the benefit that would be provided under the Prior Plan if the compensation and benefit limits did not apply minus the benefit actually provided under the Prior Plan disregarding the benefit limits.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 57 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Available forms of payment •Under the terms of the Qualified Plan, the entire benefit may be paid as a lump sum. •Messrs. Krishna, Kavanaugh, and Thomas have elected to receive their Nonqualified Plan benefit in a lump sum immediately following separation from service. •The maximum lump sum amount that the eligible named executive officers could have elected to receive under the Qualified Plan and Nonqualified Plan, as of January 1, 2026, if they had a separation from service from IBM on December 31, 2025, was equal to:
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name | Maximum lump sum | | | | | | | | | Qualified plan | Nonqualified plan | | Total available lump sum | | | A. Krishna | | $313,631 | | $98,332 | | $411,963 | | J.J. Kavanaugh | | 249,197 | | 91,126 | | 340,323 | | R.D. Thomas | | 140,972 | | 304 | | 141,276 | | G. Cohn | | 37,264 | | N/A | | 37,264 | | A. Robinson | | 17,794 | | N/A | | 17,794 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
A participant may elect to receive his or her entire benefit, or the portion of the benefit that is not paid as a lump sum, in the form of a single life annuity or in certain other actuarially equivalent forms of payment. Annual pension benefits •The annual pension benefit that was earned as of December 31, 2007, under the Prior Plan, and as of December 31, 2025 under the RBA, and that is payable as a single life annuity beginning at normal retirement age for each of the eligible named executive officers is below. Because Messrs. Krishna, Kavanaugh, and Thomas will receive a lump sum payment for their Nonqualified Plan benefits, no amount is represented for them in the Nonqualified Plan column below:
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name | Annual pension benefit at normal retirement age | | | | | | | | | Qualified plan | Nonqualified plan | | Total benefit | | | A. Krishna | | $27,731 | | N/A | | $27,731 | | J.J. Kavanaugh | | 25,635 | | N/A | | 25,635 | | R.D. Thomas | | 20,239 | | N/A | | 20,239 | | G. Cohn | | 3,064 | | N/A | | 3,064 | | A. Robinson | | 2,210 | | N/A | | 2,210 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Present value of accumulated benefit •The present value of accumulated benefit is the value as of December 31, 2025 of the annual Prior Plan pension benefit that was earned as of December 31, 2007, and under the RBA earned as of December 31, 2025. •The annual pension benefit is the benefit that is payable for the named executive officer’s life beginning at his normal retirement age. •The normal retirement age is defined as the later of age 65 or the completion of one year of service. •Certain assumptions were used to determine the present value of accumulated benefits. Those assumptions are described immediately following the 2025 Pension Benefits Table.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 58 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
2025 Pension benefits table As noted in the General Description and Purpose to the 2025 Retention Plan Narrative, the 2025 Pension Benefits Table does not include amounts reflected in the 2025 Retention Plan Table.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name (a) | Plan name (b) | Number of years credited service(1) (#) (c) | Present value of accumulated benefit ($) (d) | | Payments during last fiscal year ($) (e) | | | A. Krishna | Prior Plan | 17 | | $274,023 | | $0 | | | RBA | 2 | | 37,760 | | 0 | | | Nonqualified Plan | 17 | | 96,926 | | 0 | | | Total Benefit | | | $408,709 | | $0 | | J.J. Kavanaugh | Prior Plan | 12 | | $202,172 | | 0 | | | RBA | 2 | | 36,242 | | 0 | | | Nonqualified Plan | 12 | | 86,351 | | 0 | | | Total Benefit | | | $324,765 | | $0 | | R.D. Thomas | Prior Plan | 9 | | $90,718 | | 0 | | | RBA | 2 | | 33,263 | | 0 | | | Nonqualified Plan | 9 | | 264 | | 0 | | | Total Benefit | | | $124,245 | | $0 | | G. Cohn | Prior Plan | N/A | | N/A | | 0 | | | RBA | 2 | | 37,515 | | 0 | | | Nonqualified Plan | N/A | | N/A | | 0 | | | Total Benefit | | | $37,515 | | $0 | | A. Robinson | Prior Plan | N/A | | N/A | | 0 | | | RBA | 1 | | 16,503 | | 0 | | | Nonqualified Plan | N/A | | N/A | | 0 | | | Total Benefit | | | $16,503 | | $0 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
(1)For each of the Prior Plan and the Nonqualified Plan, reflects years of credited service as of December 31, 2007 and each of the named executive officers with a Prior Plan benefit and a Nonqualified Plan benefit above has 18 additional years of service with IBM after that date. Assumptions to determine present value as of December 31, 2025 for each eligible named executive officer: •Measurement date: December 31, 2025 •Interest rate for present value: 5.20% •To determine Personal Pension Account benefit: •Interest crediting rate: 4.70% for 2026 and 4.100% for 2027 and after •Interest rate to convert Personal Pension Account balance to single life annuity: 4.0900% for years 1-5, 5.1500% for years 6-20, and 5.9467% for year 21 and after •Mortality table to convert Personal Pension Account balance to single life annuity is 2026 Pension Protection Act Optional Combined Unisex Table •To determine RBA benefit: •Interest crediting rate: 6.0% for 2026 and 4.10% for 2027 and after •Interest rate to convert Retirement Benefit Account balance to single life annuity: 4.1300% for years 1-5, 5.2050% for years 6-20, and 6.0050% for year 21 and after •Mortality table to convert RBA balance to single life annuity is 2026 Pension Protection Act Optional Combined Unisex Table
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 59 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
•Mortality (pre-commencement): None •Mortality (post-commencement): Modified PRI-2012 White Collar sex-distinct tables for retirees, with applicable adjustments •Withdrawal rates: None •Retirement rates: None prior to Assumed Retirement Age •Normal Retirement Age: Age 60 for Retention Plan, Age 65 for IBM Personal Pension Plan •Assumed Retirement Age: Later of Age 60 for Retention Plan, Age 65 for IBM Personal Pension Plan, or current age •Accumulated benefit for (i) the Prior Plan and the Retention Plan is calculated based on credited service and compensation history as of December 31, 2007; and (ii) the RBA is calculated based on credited service and pay as of December 31, 2025. •In the case of the qualified Personal Pension Account formula, the benefit is payable as a 90% lump sum/10% annuity for Messrs. Krishna, Kavanaugh, and Thomas beginning on the first day of the month following a separation from service from IBM. The Excess Plan’s Personal Pension Plan Account formula benefit for Messrs. Krishna, Kavanaugh and Thomas is payable as a lump sum. The six-month delay under the Nonqualified Plan for “specified employees” as required under Section 409A of the Internal Revenue Code was disregarded for this purpose. •In the case of the RBA formula, the benefit is payable as a 90% lump sum/10% annuity for all named executive officers beginning on the first day of the month following a separation from service from IBM. The Retirement Benefit Account formula benefit for the named executive officers is payable as a lump sum. •All results shown are estimates only; actual benefits will be based on precise credited service and compensation history, which will be determined at separation from service from IBM. Assumptions to determine present value as of December 31, 2024: •The column titled Change in Pension Value in the 2025 Summary Compensation Table quantifies the change in the present value of the pension benefit from December 31, 2024 to December 31, 2025. •To determine the present value of the pension benefit as of December 31, 2024, the same assumptions that are described above to determine the present value as of December 31, 2025 were used, except: 1.a 5.5% interest rate; 2.to determine the Personal Pension Account benefit, the following were used: •Interest crediting rate: 5.20% for 2025 and 4.30% for 2026 and after •Interest rate to convert Personal Pension Account balance to single life annuity: 4.3633% for years 1-5, 4.9200% for years 6-20, and 5.3700% for year 21 and after •Mortality table for Personal Pension Account balance conversion: 2025 Pension Protection Act Optional Combined Unisex Table; and 3.To determine the RBA benefit, the following were used: •Interest crediting rate: 6.00% for 2025 and 2026 and 4.30% for 2027 and after •Interest rate to convert RBA balance to single life annuity: 4.3350% for years 1-5, 4.8600% for years 6-20, and 5.3250% for year 21 and after •Mortality table for RBA balance conversion: 2025 Pension Protection Act Optional Combined Unisex Table
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 60 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
IBM Excess savings plan — U.S. General description and purpose •The purpose of the Excess Savings Plan is to give eligible employees with the opportunity to save for retirement on a tax-deferred basis and provide benefits that would be provided under the qualified IBM 401(k) Plan if the compensation limits did not apply. Eligibility is based on those 401(k) participants whose eligible pay is expected to exceed the Internal Revenue Code compensation limit for the applicable plan year. •Account balances in the Excess Savings Plan are comprised of cash amounts that were deferred by the participant or contributed by IBM (Basic Account), and all deferred shares, comprised of shares that were deferred by the participant (Deferred IBM Shares). Generally, amounts deferred and vested prior to January 1, 2005 are not subject to Section 409A of the Internal Revenue Code, while amounts deferred and vested on and after January 1, 2005 are subject to Section 409A of the Internal Revenue Code. •The Excess Savings Plan is an unfunded plan and a participant’s account balance is only payable once a participant separates from service with IBM. •Certain IBM matching and automatic contributions are subject to forfeiture or rescission if a participant is terminated for cause or engages in competitive or other activity detrimental to IBM during or following employment. •While Ms. Robinson was eligible for the plan in 2025, she did not elect to participate. Compensation eligible for deferral under excess savings plan •Participants may elect to defer up to 80% of salary and eligible performance pay, which includes annual incentive program payments. Deferred IBM shares •Prior to January 1, 2008, any executive could have elected to defer receipt of shares of IBM stock that otherwise would be paid as a result of the vesting of certain restricted stock unit awards granted on or before December 31, 2007, under IBM’s Long-Term Performance Plan (LTPP). Such deferral occurred when the awards vested. •In addition, in accordance with Internal Revenue Service rules, an executive could have also elected to defer receipt of shares of IBM stock that otherwise would be paid on or before February 1, 2008, as a result of the vesting of Performance Share Unit (PSU) awards under IBM’s LTPP. •Dividend equivalents on Deferred IBM Shares are paid in cash at the same rate and on the same date as the dividends paid to IBM stockholders and are contributed to the Basic Account. IBM Matching contributions •IBM credits matching contributions each pay period to the Basic Account of each eligible participant who deferred salary or eligible performance pay under the Excess Savings Plan. •The matching contributions equal the percentage of the sum of (i) 5% times the amount the participant elects to defer under the Excess Savings Plan; and (ii) 5% times the eligible compensation after reaching the Internal Revenue Code compensation limits. IBM Automatic contributions •Automatic contributions ceased on December 31, 2023. However with respect to performance pay paid through April 9, 2024, IBM credited automatic contributions each pay period to the Basic Account of each eligible participant. •The automatic contributions for such period equaled a percentage of the sum of: (i) the amount of performance pay the participant elected to defer under the Excess Savings Plan; and (ii) the participant’s eligible compensation after reaching the Internal Revenue Code compensation limits, through April 9, 2024. The automatic contribution percentage for a participant for this period with respect to performance pay is equal to the participant’s automatic contribution percentage they were eligible for under the IBM 401(k) Plus Plan as of December 31, 2023. The automatic contribution percentage was: 2% for Messrs. Krishna, Kavanaugh and Thomas; and 1% for Mr. Cohn.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 61 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Earnings measures •A participant’s contributions to the Basic Account are adjusted for earnings and losses, until it has been completely distributed, based on investment choices selected by the participant. •IBM does not pay guaranteed, above-market or preferential earnings in the Excess Savings Plan. •The available investment choices are the same as the primary investment choices available under the IBM 401(k) Plan, which includes the IBM Stock Fund. •A participant may change the investment selections for new payroll deferrals as frequently as each semi-monthly pay cycle and may change investment selections for existing account balances daily, subject to excessive trading restrictions. •Effective January 1, 2008, the IBM match under the Excess Savings Plan is notionally invested in the investment options in the same manner participant contributions are notionally invested. •Because Deferred IBM Shares are credited, maintained, and ultimately distributed only as shares of IBM’s common stock, they may not be transferred to any other investment choice at any time. •On a quarterly basis, dividend equivalents are credited to a participant’s account with respect to all or a portion of such account that is deemed to be invested in the IBM Stock Fund at the same rate as dividends to IBM stockholders. •Aggregate earnings on Deferred IBM Shares during the last fiscal year, as reported in column (d) of the 2025 Nonqualified Deferred Compensation Table are calculated as the change in the price of IBM’s common stock between December 31, 2024 and December 31, 2025, for all Deferred IBM Shares. •Aggregate earnings reflect an $8 quarterly administrative fee. Payouts, withdrawals, and other distributions •No payouts, withdrawals or other distributions from the Basic Account are permitted prior to a separation from service from IBM. •At termination, the balance in an eligible executive’s Basic Account that was deferred prior to January 1, 2005, is paid to the executive in an immediate lump sum unless: (a) the balance exceeds $25,000; and (b) the executive satisfies the following age and service criteria: •At least age 55 with 15 years of service; •At least age 62 with 5 years of service; •At least age 65 with 1 year of service; •Any age with at least 30 years of service, provided that, as of June 30, 1999, the executive had at least 25 years of service or was at least age 40 with 10 years of service; or •Commencing benefits under the IBM Long-Term Disability Plan. •As of December 31, 2025, Messrs. Krishna and Kavanaugh had satisfied the age and service criteria. •If the participant has satisfied the age, service, and account balance criteria at termination, but has not made a valid advance election of another form of distribution, the amount of the participant’s Basic Account that was deferred prior to January 1, 2005, is paid in a lump sum in February of the year following separation. •If the participant has satisfied the age, service, and account balance criteria at termination and has made a valid advance election, the amount of the participant’s Basic Account that was deferred prior to January 1, 2005, is paid as elected by the participant from among the following choices: 1.Lump sum upon termination; 2.Lump sum in February of the year following termination; or 3.Annual installments (beginning February 1 of the year following termination) for a number of years (between two and ten) elected by the participant.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 62 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
•The participant’s Basic Account with respect to amounts deferred on or after January 1, 2005, may be distributed in the following forms as elected by the participant: 1.Lump sum upon separation; 2.Lump sum in February of the year following separation; or 3.Annual installments (beginning February 1 of the year following separation) for a number of years (between two and ten) elected by the participant. However, if the participant has elected annual installments and the total balance of the participant’s Basic Account upon a separation from service from IBM is less than 50% of the applicable Internal Revenue Code compensation limit (in 2025, 50% of this limit was $175,000), the amounts deferred on or after January 1, 2005 are distributed in a lump sum on the date installments would have otherwise begun. •Distribution elections may be changed in advance of separation, in accordance with Internal Revenue Code rules. •Distribution elections apply to both the Basic Account and the Deferred Shares Account, and different distribution elections are permitted to be made for the amounts that were deferred before January 1, 2005, and the amounts that were deferred on or after January 1, 2005 in each account. •These distribution rules are subject to Section 409A of the Internal Revenue Code, including, for example, the rule that a “specified employee” may not receive a distribution of post-2004 deferrals until at least six months following a separation from service from IBM. All named executive officers were “specified employees” under Section 409A at the end of the last fiscal year. 2025 Nonqualified deferred compensation table
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Name (a) | Plan | Executive contributions in last FY(1) ($) (b) | | | Registrant contributions in last FY(2) ($) (c) | | Aggregate earnings in last FY(3) ($) (d) | | Aggregate withdrawal/ distributions ($) (e) | Aggregate balance at last FYE(4) ($) (f) | | | A. Krishna | Basic Account | | $267,500 | Match | | $250,000 | | $1,982,570 | $0 | | $12,562,498 | | | Deferred IBM Shares | | 0 | | | 0 | | 0 | 0 | | 0 | | | Total | | $267,500 | | | $250,000 | | $1,982,570 | $0 | | $12,562,498 | | J.J. Kavanaugh | Basic Account | | $136,910 | Match | | $131,913 | | $2,299,527 | $0 | | $12,635,856 | | | Deferred IBM Shares | | 0 | | | 0 | | 11,381 | 0 | | 44,135 | | | Total | | $136,910 | | | $131,913 | | $2,310,908 | $0 | | $12,679,991 | | R.D. Thomas | Basic Account | | $116,210 | Match | | $116,210 | | $320,477 | $0 | | $2,139,314 | | | Deferred IBM Shares | | 0 | | | 0 | | 0 | 0 | | 0 | | | Total | | $116,210 | | | $116,210 | | $320,477 | $0 | | $2,139,314 | | G. Cohn | Basic Account | | $2,326,400 | Match | | $127,900 | | $1,340,896 | $0 | | $8,431,082 | | | Deferred IBM Shares | | 0 | | | 0 | | 0 | 0 | | 0 | | | Total | | $2,326,400 | | | $127,900 | | $1,340,896 | $0 | | $8,431,082 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
(1)A portion of the amount reported in this column (b) for each named executive officer’s Basic Account is included within the amount reported as salary for that officer in column (c) of the 2025 Summary Compensation Table. These amounts are: $75,000 for Mr. Krishna; $50,010 for Mr. Kavanaugh; $22,870 for Mr. Thomas; and $936,000 for Mr. Cohn. (2)For each of the named executive officers, the entire amount reported in this column (c) is included within the amount reported in column (i) of the 2025 Summary Compensation Table. (3)None of the amounts reported in this column (d) are reported in column (h) of the 2025 Summary Compensation Table because IBM does not pay above-market or preferential earnings on deferred compensation. (4)Amounts reported in this column (f) for each named executive officer include amounts previously reported in IBM’s Summary Compensation Table in previous years when earned if that officer’s compensation was required to be disclosed in a previous year. Amounts previously reported in such years include previously earned, but deferred, salary and incentive and IBM contributions. This total reflects the cumulative value of each named executive officer’s deferrals, IBM contributions and investment experience, including an $8 quarterly administrative fee.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 63 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
Introduction IBM does not have any plans, programs, or agreements under which payments to any of the named executive officers are triggered by a change of control of IBM, a change in the named executive officer’s responsibilities or a constructive termination. The only payments or benefits that would be provided by IBM to a named executive officer following a termination of employment would be provided under the terms of IBM’s existing compensation and benefit programs (as described below). The 2025 Potential Payments Upon Termination Table that follows this narrative reports such payments and benefits for each named executive officer assuming termination on the last business day of the fiscal year end. As explained below, certain of these payments and benefits are enhanced by or dependent upon the named executive officer’s attainment of certain age and service criteria at termination. Additionally, certain payments or benefits are not available following a termination for cause and/or may be subject to forfeiture and clawback if the named executive officer engages in certain activity that is detrimental to IBM. In addition, performance pay paid to executive officers, including each named executive officer, are subject to repayment under IBM’s recovery policy. This 2025 Potential Payments Upon Termination Narrative and the 2025 Potential Payments Upon Termination Table do not reflect payments that would be provided to each named executive officer under (i) the Qualified Plan; (ii) the Nonqualified Plan; (iii) the IBM 401(k) Plan; (iv) the IBM Individual Separation Allowance Plan; or (v) with respect to retiree medical or life insurance benefits, following termination of employment on the last business day of the fiscal year end because these plans are generally available to all U.S. regular employees similarly situated in age, years of service and date of hire and do not discriminate in favor of executive officers. The 2025 Potential Payments Upon Termination Table does not contain a total column because the Retention Plan payment is paid as an annuity, not a lump sum. Therefore, a total column would not provide any meaningful disclosure. Annual incentive program (AIP) •The AIP may provide a lump sum, cash payment in April of the year following resignation, retirement or involuntary termination without cause. An AIP payment may not be paid if an executive engages in activity that is detrimental to IBM. •This payment is not triggered by termination; the existence and amount of any AIP payment is determined under the terms of the AIP applicable to all eligible executives, who are employed through December 31 of the previous year. •AIP payments to executive officers are subject to clawback. •For purposes of the 2025 Potential Payments Upon Termination Table below, it is assumed that the AIP payment made to each named executive officer following termination of employment on the last business day of the fiscal year end would have been the same as the actual payment made in April 2026. IBM Long-term performance plans (LTPP) •The named executive officers have certain outstanding equity grants under the LTPP including: •Stock Options; •Restricted Stock Units (RSUs); •Retention Restricted Stock Units (RRSUs); and/or •Performance Share Units (PSUs) •The LTPP and/or the named executive officers’ equity award agreements contain the following terms: •Generally, unvested Stock Options, RSUs, RRSUs, and PSUs are cancelled upon termination; and •Vested Stock Options may be exercised only for 90 days following termination.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 64 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
•Payment of these awards is not triggered by termination of employment (because the awards would become payable under the terms of the LTPP if the named executive officer continued employment), but if he or she resigns, retires or is involuntarily terminated without cause after attaining age 55 with at least 15 years of service (for Ms. Robinson, pursuant to her offer letter, she must be employed through December 31, 2027, regardless of age and service at termination), the following terms apply: •Vested Stock Options continue to be exercisable for the remainder of their ten-year term; and •IBM prorates a portion of eligible unvested PSU awards to continue to vest under their original vesting schedules. •If an executive dies, outstanding Stock Options, RSU awards and RRSU awards vest immediately, and outstanding PSU awards would remain outstanding and continue to vest under their original vesting schedules. •If an executive becomes disabled, unvested Stock Options, RSUs and RRSUs would continue to vest under their original vesting schedules, and unvested PSUs would remain outstanding and continue to vest under their original vesting schedules. •In cases other than death or disability, certain executives may be eligible for continued vesting of these awards after separation, other than RRSUs. •To ensure that the interests of the members of the Performance Team are aligned with IBM’s long-term interests as these leaders approach retirement, these executives, including the named executive officers, may be eligible to receive payouts of their full unvested PSU and RSU awards upon termination, and effective for Stock Options granted after 2021, unvested Stock Options may continue to vest upon termination, if the following criteria are met: •The executive is on the Performance Team at the time of departure; •For RSU awards and Stock Options, at least one year has passed since the award grant date; and for PSU awards, at least one year has passed in the performance period; •The executive has reached age 55 with 15 years of service at the time of departure (for Ms. Robinson, pursuant to her offer letter, she must be employed through December 31, 2027, regardless of age and service at termination); and •The payout has been approved by appropriate senior management, the Compensation Committee, or the Board, in their discretion. •The Chairman, President and CEO is also eligible for the payouts described upon termination, but instead must reach age 60 with 15 years of service, and the payout must be approved by the Board, in its discretion. •Payouts of PSU awards after termination as described above will be made in February after the end of the three-year performance period based on the final program score. Payouts of RSU awards after termination, as described above, will be made in accordance with the original vesting schedule. Unvested Stock Options will continue to vest and vested Stock Options (including those that vest after termination of employment) will be exercisable for the remainder of the original contractual term of the Stock Option. •The 2025 Potential Payments Upon Termination Table assumes the following: •Amounts shown include the payout of the 2023 PSU awards calculated using the actual performance achieved for the 2023-2025 performance period and the 2025 fiscal year-end closing price of $296.21 for IBM common stock; and •Outstanding 2024 and 2025 PSU awards were not included because there is no guarantee of payment on these awards as they are subject to meeting threshold performance criteria. •Amounts shown include the value of 2022, 2023 and 2024 RSU awards and 2022, 2023 and 2024 Stock Options, if the required retirement criteria are met, at the fiscal year-end closing price of $296.21 for IBM common stock because the one-year service requirement from grant has been completed; and •Outstanding 2025 RSU awards and Stock Options are not included because the required service of at least one year since the award date of grant has not been completed. •Outstanding vested but unexercised options are not included, because termination does not change the ability to exercise the vested options at year-end. •LTPP awards for executive officers are subject to forfeiture and rescission if an executive is terminated for cause or engages in activity that is detrimental to IBM prior to or within 12 months following release, exercise, or payment (or within 36 months for RRSU awards). LTPP awards granted prior to February 1, 2023 for executive officers also contain a covenant that the recipient will not solicit IBM clients for a period of one year or employees for a period of two years following termination of employment. In addition, PSU payouts to executive officers are subject to clawback as described in Section 4 of the 2025 Compensation Discussion and Analysis.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 2026 Notice of Annual Meeting & Proxy Statement | 65 |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
IBM Supplemental executive retention plan (Retention plan) •Payments under the Retention Plan are triggered by resignation, retirement, or involuntary termination without cause after attainment of eligibility criteria. •Eligibility criteria are described in the 2025 Retention Plan Narrative. •Retention Plan payments are paid as an annuity beginning on the first day of the month following termination of employment (subject to a six-month delay for “specified employees” as required under Section 409A of the Internal Revenue Code). •At termination, the executive chooses either a single life annuity or an actuarially equivalent joint and survivor annuity. •The 2025 Potential Payments Upon Termination Table reflects the annual amount payable as a single life annuity. •This table does not reflect the following provisions that would apply in accordance with Section 409A of the Internal Revenue Code: •The payment would be delayed six months following termination; and •Amounts not paid during the delay would be paid (with interest) in July 2026. •Retention Plan payments are subject to forfeiture and rescission if an executive is terminated for cause or engages in activity that is detrimental to IBM at any time prior to or following commencement of Retention Plan payments. IBM Excess savings plan •As described in the 2025 Nonqualified Deferred Compensation Narrative, payment of the named executive officers’ Excess Savings Plan accounts (Basic Accounts and any Deferred IBM Shares) is triggered by resignation, retirement, or involuntary termination. •With respect to IBM contributions made to a participant’s account after March 31, 2010, if a participant engages in activity that is detrimental to IBM, the Excess Savings Plan allows the clawback of such IBM contributions made during the 12-month period prior to the detrimental activity through the date of termination. •The 2025 Potential Payments Upon Termination Table indicates the estimated amount and the time and form of payment, determined by either the executive’s distribution election in effect, if any, or the plan’s default distribution provision. •Estimated payments were calculated using the aggregate account balance as of the last business day of the fiscal year end, without assumptions for the following between such date and the distribution date(s): •Investment gains and losses on the Basic Account (including dividend equivalent reinvestment for the IBM Stock Fund); and •Fluctuations in the market price of IBM stock for Deferred IBM Shares. •The tables do not reflect: •That payment of amounts deferred after December 31, 2004 (and the associated earnings) are subject to a six-month delay for “specified employees” as required under Section 409A of the Internal Revenue Code; or •Any other restriction on such payments imposed by the requirements of Section 409A of the Internal Revenue Code.
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| 66 | IBM |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
2025 Potential payments upon termination table
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| | | | | LTPP | | | | | | Nonqualified deferred compensation excess savings(6) | | | | | Name | Termination scenario | Annual incentive program(2) ($) | | Stock options(3) ($) | | Stock awards(4) ($) | | Retention plan(5) ($) | | Basic account ($) | | Deferred IBM shares ($) | | | A. Krishna | Termination(1) | | $5,250,000 | | $27,905,971 | | $34,739,805 | | N/A | | $12,562,498(7) | | N/A | | | For Cause | | 0 | | 0 | | 0 | | N/A | | 12,312,498(7) | | N/A | | J.J. Kavanaugh | Termination(1) | | 2,584,500 | | 16,038,344 | | 20,034,164 | | $10,904 | | 12,635,856(8) | | $44,135(8) | | | For Cause | | 0 | | 0 | | 0 | | 0 | | 12,503,943(8) | | 44,135(8) | | R.D. Thomas | Termination(1) | | 2,370,000 | | 0 | | 12,513,984 | | N/A | | 2,139,314(9) | | N/A | | | For Cause | | 0 | | 0 | | 0 | | N/A | | 2,023,104(9) | | N/A | | G. Cohn | Termination(1) | | 2,370,000 | | 0 | | 10,488,796 | | N/A | | 8,431,082(10) | | N/A | | | For Cause | | 0 | | 0 | | 0 | | N/A | | 8,303,182(10) | | N/A | | A. Robinson | Termination(1) | | 2,068,500 | | 0 | | 1,871,455 | | N/A | | 0 | | N/A | | | For Cause | | 0 | | 0 | | 0 | | N/A | | 0 | | N/A |
Evaluation of Vice Chairman and SVP target pay by the Chairman, President and CEO and the Compensation Committee
| Year (a) | Summary compensation total for the principal executive officer (PEO) (b)(1) | | Compensation actually paid to the PEO (c)(1)(6) | | Average summary compensation table total for Non-PEO named executive officers (Non-PEO NEOs) (d)(2) | | Average compensation actually paid to Non-PEO NEOs (e)(2)(6) | | Value of initial fixed $100 investment based on: | | | | | | | | | | | | | | | | Total shareholder return (f) | | Peer group total shareholder return (g)(3) | | Net income (in $M) (h)(4) | Revenue (in $M) (i)(5) | | 2025 | | $37,989,685 | | $83,586,950 | | $16,256,711 | | $34,963,438 | | $303 | | $210 | $10,593 | $67,535 | | 2024 | | 25,143,682 | | 57,111,357 | | 11,495,421 | | 24,996,829 | | 219 | | 169 | 6,023 | 62,753 | | 2023 | | 20,398,426 | | 32,769,352 | | 9,916,713 | | 14,444,039 | | 157 | | 135 | 7,502 | 61,860 | | 2022 | | 16,580,075 | | 23,935,007 | | 8,318,193 | | 10,496,901 | | 129 | | 92 | 1,639 | 60,530 | | 2021 | | 17,550,959 | | 23,798,901 | | 8,706,301 | | 9,116,435 | | 117 | | 130 | 5,743 | 57,350 |