DEF 14A of International Business Machines Corp, Mar 6, 2023

DEF 14A of International Business Machines Corp

Filed Mar 6, 2023 · FY20220001104659-23-029014

Open on EDGAR

  1. Director Nominees

    Director Nominees IBM’s Board is composed of a diverse, experienced group of global thought, business, and academic leaders.

  2. Director Nominees

    | Director | Age | Primary Occupation | Director Since | Committee Memberships | | | | Audit Committee Financial Expert | | Thomas Buberl | 49 | Chief Executive Officer, AXA S.A. | 2020 | | | | | | | David N. Farr | 68 | Retired Chairman and Chief Executive Officer, Emerson Electric Co. | 2012 | | | | | | | Alex Gorsky | 62 | Former Chairman and Chief Executive Officer, Johnson & Johnson | 2014 | | | | | | | Michelle J. Howard | 62 | Retired Admiral, United States Navy | 2019 | | | | | | | Arvind Krishna | 60 | Chairman and Chief Executive Officer, IBM | 2020 | | | | | | | Andrew N. Liveris | 68 | Retired Chairman and Chief Executive Officer, The Dow Chemical Company | 2010 | | | | | | | F. William McNabb III | 65 | Retired Chairman and Chief Executive Officer, The Vanguard Group, Inc. | 2019 | | | | | | | Martha E. Pollack | 64 | President, Cornell University | 2019 | | | | | | | Joseph R. Swedish | 71 | Retired Chairman, President and Chief Executive Officer, Anthem, Inc. | 2017 | | | | | | | Peter R. Voser | 64 | Retired Chief Executive Officer, Royal Dutch Shell plc, and Chairman, ABB Ltd. | 2015 | | | | | | | Frederick H. Waddell | 69 | Retired Chairman and Chief Executive Officer, Northern Trust Corporation | 2017 | | | | | | | Alfred W. Zollar | 68 | Executive Advisor, Siris Capital Group, LLC | 2021 | | | | | | | | | Number of meetings held in 2022 | | 10 | 4 | 5 | 0 | |

  3. Director Nominees

    | Audit: | | | Directors and Corporate Governance: | | | Executive Compensation and Management Resources: | | | Executive: | | | Audit Committee Financial Expert: | |

  4. Director Nominees

    2023 Notice of Annual Meeting & Proxy Statement | Proxy Summary3

  5. Optimal Mix of Skills and Experience of Director Nominees

    Optimal Mix of Skills and Experience of Director Nominees IBM’s directors collaboratively contribute significant experience in the areas most relevant to overseeing the Company’s business and strategy. The skills and experience of our Board include, but is not limited to: • Industry leaders with deep executive and oversight experience; • Global operational experience to oversee a business of IBM’s scale, scope, and complexity; • Technology, cybersecurity and digital transformation experience; • Key insight into IBM’s regulatory environment; and • Diversity of backgrounds and experiences.

  6. Our compensation strategy supports IBM’s high value business model

    | 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 and CEO, Vice Chairman and Senior Vice Presidents | | | Utilize noncompetition and nonsolicitation agreements for senior executives | | | Remove impact of share repurchase on executive incentives |

  7. Our compensation strategy supports IBM’s high value business model

    | 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 |

  8. IBM Board of Directors – Experience and Skills of Director Nominees

    IBM Board of Directors – Experience and Skills of Director Nominees

  9. IBM Board of Directors – Experience and Skills of Director Nominees

    | Director | Thomas Buberl | David N. Farr | Alex Gorsky | Michelle J. Howard | Arvind Krishna | Andrew N. Liveris | F. William McNabb III | Martha E. Pollack | Joseph R. Swedish | Peter R. Voser | Frederick H. Waddell | Alfred W. Zollar | | Client Industry Expertise | | | | | | | | | | | | | | Organizational Leadership and Management | | | | | | | | | | | | | | Global Operations | | | | | | | | | | | | | | CFO | | | | | | | | | | | | | | Specific Risk Oversight/ Risk Management Exposure | | | | | | | | | | | | | | Technology, Cybersecurity or Digital | | | | | | | | | | | | | | Academia | | | | | | | | | | | | | | Government/ Regulatory, Business Associations or Public Policy | | | | | | | | | | | | | | Public Board | | | | | | | | | | | | | | Gender Identity | Male | Male | Male | Female | Male | Male | Male | Female | Male | Male | Male | Male | | Race and/or Ethnicity | White/ Caucasian | White/ Caucasian | White/ Caucasian | Black/African American | Asian/Pacific Islander | White/ Caucasian | White/ Caucasian | White/ Caucasian | White/ Caucasian | White/ Caucasian | White/ Caucasian | Black/African American | | Born Outside the U.S. | | | | | | | | | | | | |

  10. IBM Board of Directors – Experience and Skills of Director Nominees

    The following client industries provide a snapshot into the many key and diverse industries in which our directors have relevant experience. Many of our directors have experience in multiple client industries.

  11. IBM Board of Directors – Experience and Skills of Director Nominees

    | | Healthcare | | Manufacturing | | | Energy | | Information Technology | | | Government | | Research & Development | | | Financial Services & Insurance | | Chemicals |

  12. IBM Board of Directors – Experience and Skills of Director Nominees

    2023 Notice of Annual Meeting & Proxy Statement | IBM Board of Directors9 1. Election of Directors for a Term of One Year 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.

  13. IBM Board of Directors – Experience and Skills of Director Nominees

    | | Thomas Buberl Chief Executive Officer, AXA S.A., a multinational insurance firm Director since: 2020 Age: 49 Committee: | | | | | Directors and Corporate Governance |

  14. Qualifications

    Qualifications • Global business experience as chief executive officer of AXA S.A. • Affiliation with leading business and public policy associations (member of the Climate Finance Leadership Initiative and former chair of Pan-European Insurance Forum) • Acknowledged leader in digital transformation • Outside board experience as a member of the supervisory board of Bertelsmann VerwaltungsGesellschaft

  15. Relevant experience

    Relevant experience Mr. Buberl, 49, 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.

  16. Relevant experience

    | | David N. Farr Retired Chairman and Chief Executive Officer, Emerson Electric Co., a diversified manufacturing and technology company Director since: 2012 Age: 68 Committee: | | | | | Audit |

  17. Qualifications

    Qualifications • Global business and technology experience as chairman and chief executive officer of Emerson Electric Co. • Affiliation with leading business and public policy associations (former director of the U.S.-China Business Council) • Outside board experience as former director of Delphi Corporation Mr. Farr, 68, 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.

  18. Qualifications

    | | Alex Gorsky Former Chairman and Chief Executive Officer, Johnson & Johnson, a global healthcare products company Director since: 2014 Age: 62 Committee: | | | | | Executive |

  19. Qualifications

    Qualifications • Global business and technology experience as executive chairman and chief executive officer of Johnson & Johnson • Affiliation with leading business and public policy associations (former Chair of the Business Roundtable’s Corporate Governance Committee and former member of the Business Council Executive Committee) • Leader in diversity & inclusion and veterans’ issues • Member of an advisory board at an academic institution

  20. Relevant experience

    Relevant experience Mr. Gorsky, 62, 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 NewYork-Presbyterian Hospital, and the Travis Manion Foundation, and serves on the Wharton School of the University of Pennsylvania Board of Advisors.

  21. Relevant experience

    | | Michelle Howard Retired Admiral, United States Navy Director since: 2019 Age: 62 Committee: | | | | | Audit |

  22. Qualifications

    Qualifications • Leadership and policy experience as the U.S. Navy’s first woman four-star admiral • Operational experience as commander of U.S. Naval Forces in Europe and Africa • Global operations and technology experience as Vice Chief of Naval Operations, with focus on cybersecurity and information technology in the digital age • Leadership and teaching positions in government and academia

  23. Relevant experience

    Relevant experience Admiral Michelle J. Howard, 62, is a retired United States Navy officer. Admiral Howard began serving in the United States 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 United States 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. In 2022, she was appointed by the President to the Board of Visitors of the U.S. Naval Academy.

  24. Relevant experience

    | | Arvind Krishna Chairman and Chief Executive Officer, IBM Director since: 2020 Age: 60 Committee: | | | | | Executive (Chair) |

  25. Qualifications

    Qualifications • Global business and organizational leadership experience as chairman and chief executive officer of IBM • Research experience as Director of IBM Research and a computer scientist with expertise in key IBM technologies such as artificial intelligence, cloud and quantum computing • Technology experience as general manager of IBM’s Systems and Technology group and Senior Vice President for IBM’s Cloud and Cognitive Software • Outside business experience as a director of the Federal Reserve Bank of New York

  26. Relevant experience

    Relevant experience Arvind Krishna, 60, 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. 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.

  27. Relevant experience

    | | Andrew N. Liveris Retired Chairman and Chief Executive Officer, The Dow Chemical Company, a materials, polymer, chemicals, and biological sciences enterprise Director since: 2010 Age: 68 Committees: | | | | | Directors and Corporate Governance (Chair) | | | | Executive |

  28. Qualifications

    Qualifications • Global business and technology experience as the chairman, president and chief executive officer of The Dow Chemical Company and executive chairman of DowDuPont Inc. • U.S. and international government service (member of the President’s Task Force on Apprenticeship Expansion, member of the Australian government’s Industry Growth Centres Advisory Committee and a former member of Thailand’s Board of Investment) • Affiliation with leading business and public policy associations • Experience as a university trustee

  29. Relevant experience

    Relevant experience Mr. Liveris, 68, 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. In 2016, he transitioned the president role and 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, NOVONIX Limited and chairman of the board of Lucid Motors. Mr. Liveris is stepping down as chairman of Lucid Motors in April; he also will step down as a director in another public company within the next 12 months. 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 Minderoo Foundation of Australia, and 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.

  30. Relevant experience

    | | Frederick William McNabb, III Retired Chairman and Chief Executive Officer, The Vanguard Group, Inc., one of the world’s largest investment management companies Director since: 2019 Age: 65 Committee: | | | | | Audit |

  31. Qualifications

    Qualifications • Global business and technology experience as chairman and chief executive officer of The Vanguard Group, Inc. • Outside board experience as a director of UnitedHealth Group • Member of several advisory boards at academic institutions

  32. Relevant experience

    Relevant experience Mr. McNabb, 65, 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.

  33. Relevant experience

    | | Martha E. Pollack President, Cornell University, a leading research university that creates new technologies and achieves fundamental breakthroughs in understanding and improving lives around the world Director since: 2019 Age: 64 Committee: | | | | | Executive Compensation and Management Resources |

  34. Qualifications

    Qualifications • Organizational leadership, management and risk oversight, and management experience as president of Cornell University • Research 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 • Healthcare experience as a former member of the Board of Directors of the University of Michigan Hospitals and Health Center, and as a member (ex officio) of the board of overseers of Weill Cornell Medicine • Technology experience as a fellow of the Association for Computing Machinery, a former president of the Association for the Advancement of Artificial Intelligence, a former board member of the Computing Research Association, and a former member of the technical staff in the Artificial Intelligence Center at SRI International Dr. Pollack, 64, is the president of Cornell University and a professor of computer science, information science and linguistics. She took office in 2017. 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, a former president of the Association for the Advancement of Artificial Intelligence, a former member of the technical staff in the Artificial Intelligence Center at SRI International, a former member of the advisory committee for the National Science Foundation’s Computer and Information Science and Engineering Division, and a former 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 currently a board member of the American Association of Universities, and a Trustee of Ithaka. In 2022, Dr. Pollack was elected as a member of the American Academy of Arts & Sciences.

  35. Qualifications

    | | Joseph R. Swedish Retired Chairman, President and Chief Executive Officer, Anthem, Inc., a leading health benefits provider Director since: 2017 Age: 71 Committee: | | | | | Executive Compensation and Management Resources |

  36. Qualifications

    Qualifications • Global business and technology experience as executive chairman, president, and chief executive officer of Anthem, Inc. • Affiliation with leading business and public policy associations (former member of the Business Roundtable and graduate member of The Business Council) • Outside board and technology experience as a director of CDW Corporation • Experience as the chairman of a university oversight board

  37. Relevant experience

    Relevant experience Mr. Swedish, 71, joined Anthem in 2013 as chief executive officer and was named chairman of Anthem’s board in 2015. He was the chairman, chief executive officer and president until late 2017 when he retired and became the executive chairman, a position he held until his retirement in May 2018. Prior to joining Anthem, he was the division president of Hospital Corporation of America from 1993 to 1998, president and chief executive officer of Centura Health from 1999 to 2004 and then served as president and chief executive officer of Trinity Health Corporation from 2004 to 2013. Mr. Swedish became a director of Mesoblast Limited in 2018 and was named its chairman in March 2019. He is also a director of Centrexion Therapeutics and CDW Corporation. He also served as a director of the Blue Cross Blue Shield Association, the National Institute for Health Care Management, the Central Indiana Corporate Partnership, Inc. and as a member of the Business Roundtable. Mr. Swedish is currently a member and past chairman of the Board of Visitors of Duke University’s Fuqua School of Business and was the past chairman of America’s Health Insurance Plans. He is a graduate member of The Business Council and a past member of the Duke Margolis External Advisory Board. Mr. Swedish also serves as Co-Founder and Partner at Concord Health Partners, a private equity firm focused on strategic investing in healthcare portfolio companies.

  38. Relevant experience

    | | Peter R. Voser Retired Chief Executive Officer, Royal Dutch Shell plc, a global group of energy and petrochemical companies; Chairman, ABB Ltd., a global group of power and automation companies Director since: 2015 Age: 64 Committees: | | | | | Audit (Chair) | | | | Executive |

  39. Qualifications

    Qualifications • Global business and technology experience as chairman of ABB Ltd. and chief executive officer of Royal Dutch Shell plc • Affiliation with leading business and public policy associations (former member of the European Round Table of Industrialists and a former member of The Business Council) • Outside board experience as a director of Temasek

  40. Relevant experience

    Relevant experience Mr. Voser, 64, 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.

  41. Relevant experience

    | | Frederick H. Waddell Retired Chairman and Chief Executive Officer, Northern Trust Corporation, a financial services company Director since: 2017 Age: 69 Committees: | | | | | Executive Compensation and Management Resources (Chair) | | | | Executive |

  42. Qualifications

    Qualifications • Global business and technology experience as chairman and chief executive officer of Northern Trust Corporation • Outside board experience as a director of AbbVie Inc. • Experience as a university trustee

  43. Relevant experience

    Relevant experience Mr. Waddell, 69, joined Northern Trust Corporation in 1975 and served as the chairman of the board from November 2009 until his retirement in January 2019. He previously served as chief executive officer from 2008 through 2017, as president from 2006 through 2011 and again from October to December 2016, and as chief operating officer from 2006 to 2008. Additionally, Mr. Waddell is a member of the Board of Trustees of the Art Institute of Chicago, the Chicago Symphony Orchestra, and Northwestern University, and a director of AbbVie Inc.

  44. Relevant experience

    | | Alfred W. Zollar Executive Advisor, Siris Capital Group LLC, a private equity firm Director since: 2021 Age: 68 Committee: | | | | | Directors and Corporate Governance |

  45. 2022 Director Compensation Table

    2022 Director Compensation Table

  46. 2022 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | All Other Compensation ($) | Total ($) | | (a) | (b) | (c)(1) | (d) | | Thomas Buberl | 325,000 | 36,268 | 361,268 | | Michael L. Eskew(2) | 92,917 | 89,171 | 182,088 | | David N. Farr | 325,000 | 103,181 | 428,181 | | Alex Gorsky | 361,667 | 142,627 | 504,294 | | Michelle J. Howard | 325,000 | 52,894 | 377,894 | | Andrew N. Liveris | 341,667 | 203,012 | 544,679 | | F. William McNabb III | 325,000 | 46,666 | 371,666 | | Martha E. Pollack | 325,000 | 60,308 | 385,309 | | Joseph R. Swedish | 325,000 | 59,747 | 384,747 | | Peter R. Voser | 350,000 | 133,979 | 483,979 | | Frederick H. Waddell | 345,000 | 96,712 | 441,713 | | Alfred W. Zollar | 325,000 | 9,240 | 334,241 |

  47. 2022 Director Compensation Table

    (1) Amounts in this column include the following: for Mr. Buberl: $36,193 of dividend equivalent payments on PFS; for Mr. Eskew: $79,146 of dividend equivalent payments on PFS and $10,000 contributed by the Company under the Matching Grants Program; for Mr. Farr: $103,105 of dividend equivalent payments on PFS; for Mr. Gorsky: $142,552 of dividend equivalent payments on PFS; for Admiral Howard: $52,819 of dividend equivalent payments on PFS; for Mr. Liveris: $202,937 of dividend equivalent payments on PFS; for Mr. McNabb: $46,591 of dividend equivalent payments on PFS; for Dr. Pollack: $60,233 of dividend equivalent payments on PFS; for Mr. Swedish: $59,672 of dividend equivalent payments on PFS; for Mr. Voser: $133,903 of dividend equivalent payments on PFS; for Mr. Waddell: $86,637 of dividend equivalent payments on PFS and $10,000 contributed by the Company under Matching Grants Program; and for Mr. Zollar: $9,240 of dividend equivalent payments on PFS. (2) Mr. Eskew’s term on the Board ended April 2022. Fees Earned or Paid in Cash (column (b)): Amounts shown in this column reflect the annual retainer paid to each director as described above. A director receives a prorated amount of the annual retainer for service on the Board and, if applicable, as Lead Director or a committee chair, based on the portion of the year for which the director served. All Other Compensation (column (c)): Amounts shown in this column represent: • Dividend equivalent payments on PFS accounts under the DCEAP as described above. • Group life insurance premiums paid by IBM on behalf of the directors. • Value of the contributions made by IBM under IBM’s Matching Grants Program as described above. Delinquent Section 16(a) Reports: None IBM believes that all reports for IBM’s executive officers and directors that were required to be filed under Section 16 of the Securities Exchange Act of 1934 in 2022 were timely filed. Insurance and Indemnification IBM has renewed its directors and officers indemnification insurance coverage. This insurance covers directors and officers individually where exposures exist other than those for which IBM is able to provide indemnification. This coverage runs from June 30, 2022 through June 30, 2023, at a total cost of approximately $6.7 million. The primary carrier is AXA/XL Specialty Insurance Company. 242023 Notice of Annual Meeting & Proxy Statement | Director Compensation Ownership of Securities

  48. Strategic Capital Allocation

    | For 2022 performance, the Board approved an annual incentive payment of $3,480,000 for Mr. Krishna, which was 116% of target. The payout reflects a 100% Individual Contribution Factor (ICF) and the Annual Incentive Program (AIP) pool funding at 116%. | |

  49. Strategic Capital Allocation

    | Current Year Performance | Salary | Salary is a market-competitive, fixed level of compensation. | | | Annual Incentive Program (AIP) | At target, annual incentive provides a market-competitive total cash opportunity. 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. | | Long-Term Incentive | Performance Share Units (PSUs) | Equity awards are typically granted annually and may consist of PSUs, RSUs, and Stock Options. Equity grants are based on competitive positioning and vary based on individual talent factors. Lower performers do not receive equity grants. 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. In addition, a relative performance metric applies to all PSU awards. The final number of PSUs earned can be increased or decreased based on IBM’s Return on Invested Capital (ROIC) performance relative to S&P indices. | | | Restricted Stock Units (RSUs) | RSUs vest over time; typically ratably over four years. | | | Stock Options (Options) | 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. | | Retention | Stock-Based Grants & Cash Awards | Periodically, the Compensation Committee and/or the Chairman and CEO reviews outstanding stock-based awards for key executives. Depending on individual performance and the competitive environment for senior executive leadership talent, awards may be made in the form of Retention Restricted Stock Units (RRSUs), retention PSUs (RPSUs), or cash for certain executives. RRSU and RPSU vesting periods typically range from two to five years. In addition to time-based vesting, RPSUs include a relative ROIC performance metric (consistent with standard PSUs). Cash awards have a clawback if an executive leaves IBM before it is earned. | | Other Compensation | Perquisites and Other Benefits | Perquisites are intended to ensure safety and productivity of executives. Perquisites include such things as annual executive physicals, transportation, financial planning, and personal security. | | Post Employment | Savings Plan | U.S. employees may participate in the IBM 401(k) Plus Plan by saving a portion of their pay in the plan, and eligible employees may also participate in a non-qualified deferred compensation savings plan, which enables participants to save a portion of their eligible pay in excess of IRS limits for 401(k) plans. The Company provides matching and automatic contributions for both of these plans. | | | Non-qualified Savings Plan | | | | Pension Plans (closed) | Named Executive Officers (NEOs) may have legacy participation in closed retention and retirement plans, for which future accruals ceased as of December 31, 2007. | | | Supplemental Executive Retention Plan (closed) | A full description of the Retention, Pension, and Non-Qualified Deferred Compensation plans is provided in this Proxy Statement, beginning with the 2022 Retention Plan Narrative. |

  50. 2022 Metrics and Weightings

    2022 Metrics and Weightings * Non-GAAP financial metrics. See Appendix A for information on how we calculate these performance metrics. Note: For PSU performance periods that began prior to 2021, the metrics included Operating EPS at 70%, Free Cash Flow at 30%, and the ROIC Modifier. IBM shares its financial model each year with investors in the context of its long-term strategy. To provide transparency into the rigor of our goal setting process, IBM discloses the performance attainment against targets for the most recent performance period, for both the Annual Incentive Program and the Performance Share Unit Program.

  51. 2022 Annual Incentive Program

    2022 Annual Incentive Program

  52. 2022 AIP Payout Results

    2022 AIP Payout Results Based on full year financial performance against IBM revenue and operating cash flow, the weighted incentive score was 116. For 2022, there was no additional adjustment based on the diversity modifier. While executive representation of women globally, as well as Black and Hispanic executives in the United States, improved by 0.3 points, 0.7 points and 0.3 points, respectively in 2022, this improvement did not result in an increase to the incentive score. (1) Based on AIP payout table; results that exceeded 100% of target for each metric yield a higher Incentive Score. Operating Cash Flow is a non-GAAP financial metric. See Appendix A for information on how we calculate this performance metric.

  53. Performance Share Unit Program

    Performance Share Unit Program The Performance Share Unit (PSU) metrics for the 2020-2022 performance period were Operating EPS and Free Cash Flow. Targets are established at the beginning of each three-year performance period. These targets are based on IBM’s financial model, as shared with investors, and the Board-approved annual budget. The Committee’s longstanding practice is that the Company’s share repurchase activities have no effect on executive compensation. Actual operating EPS results are adjusted to remove the impact of any difference between the actual share count and the budgeted share count, while simultaneously ensuring that executive compensation targets are normalized for any planned buybacks that are incorporated into the Operating EPS target. Additionally, the scoring for the PSU Program may also take into account extraordinary events. For the 2020-2022 performance period, results were adjusted to exclude the impact of exiting our business in Russia in 2022. At the end of each three-year performance period, the Compensation Committee approves the determination of actual performance relative to pre-established targets, and the number of PSUs are adjusted up or down from 0% to 150% of targets, based on the approved actual performance. In addition, the PSU Program has a Relative Return on Invested Capital (ROIC) modifier. The modifier is based on IBM’s ROIC performance over the three-year performance period, relative to the S&P 500 Index (excluding financial services companies due to lack of comparability) and the S&P Information Technology Index. This modifier reduces the score up to 20 points when performance falls below the S&P 500 Index median, and increases the score up to 20 points when IBM exceeds the median performance of both the S&P 500 Index and the S&P Information Technology Index. The modifier has no impact when IBM’s ROIC performance falls between the S&P 500 Index median and the S&P Information Technology Index median. There is no qualitative adjustment to the PSU program score.

  54. Relative ROIC Modifier

    | | The PSU score is calculated as a weighted average of results against targets for Operating EPS (70%) and Free Cash Flow (30%). The calculation for the 2020-2022 performance period is shown in the table below. For the 2020-2022 performance period, the ROIC modifier was 0%. While IBM ROIC exceeded the median of the S&P 500 Index (excluding financial services), it did not exceed the median of the S&P Information Technology Index. |

  55. Impact of Significant One-Time Events on the Open PSU Performance Periods

    Impact of Significant One-Time Events on the Open PSU Performance Periods As discussed in prior years, in connection with the separation of Kyndryl in 2021, the Committee determined that the targets for the 2020-2022 and 2021-2023 PSU programs were no longer reflective of the Company’s strategic direction and growth objectives as communicated to stockholders prior to the announced plan to separate Kyndryl. In February 2021, the Committee approved an adjustment to the 2020-2022 PSU program targets to incorporate the planned impact of the 2021 separation of Kyndryl, including one-time transaction-related cash charges associated with the separation, and actions taken to enable the separation of Kyndryl and IBM’s growth. Following the separation of Kyndryl on November 3, 2021 into its own publicly traded company with approximately $19 billion in revenue prior to separating from IBM, a final target adjustment was made for the 2020-2022 and 2021-2023 PSU programs. The final adjustment was made to incorporate the impact of separating Kyndryl, including the early separation of Kyndryl two months ahead of schedule. As a result of the adjustments made for the Kyndryl separation and actions taken to enable IBM’s growth strategy, Operating EPS and Free Cash Flow targets for the 2020-2022 PSU program are lower than those for the 2019-2021 PSU program. Consistent with the Company’s long-standing practice of setting rigorous performance plans, cumulative targets for both plans remain higher than comparable metrics shared with investors on October 4, 2021. Section 2: Compensation Program Governance

  56. Compensation Practices

    | 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 and CEO, Vice Chairman and Senior Vice Presidents | | | Utilize noncompetition and nonsolicitation agreements for senior executives | | | Remove impact of share repurchase on executive incentives |

  57. Compensation Practices

    | 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 |

  58. 1. Making Annual Performance Commitments

    1. Making Annual Performance Commitments All IBM employees, including the Chairman and CEO, Vice Chairman and SVPs, develop goals, both qualitative and quantitative, that they seek to achieve in a particular year in support of the business. The Board of Directors reviews and approves the Chairman and CEO’s performance goals and formally reviews progress and outcomes. As part of this process, many factors are considered, including an understanding of the business risks associated with the performance goals.

  59. 2. Determining Annual Incentive Payouts

    2. Determining Annual Incentive Payouts Evaluation of Chairman and CEO Results by the Compensation Committee The Chair of the Compensation Committee works directly with the Committee’s compensation consultant to provide a decision-making framework for use by the Committee in determining annual incentive payouts for the Chairman and CEO. This framework considers the Chairman and CEO’s self-assessment of performance against commitments in the year, both qualitative and quantitative, and also considers progress against strategic objectives, an analysis of IBM’s total performance over the year and the overall Company incentive score. The Committee considers all of this information in developing its recommendations, which are then presented to the independent members of the IBM Board of Directors for further review, discussion, and final approval. Evaluation of Vice Chairman and SVP Results by the Chairman and CEO and the Compensation Committee Executives work with their managers throughout the year to update their own results against their stated goals. The self-assessments of the Vice Chairman and SVPs are reviewed by the Senior Vice President of Human Resources and the Chairman and CEO, who evaluate the information. Following this in-depth review and taking into account the Company incentive score, the Chairman and CEO makes compensation recommendations to the Compensation Committee based on an evaluation of the Vice Chairman and each SVP’s performance for the year, and the Committee decides whether to approve or adjust the Chairman and CEO’s recommendations for the Vice Chairman and SVPs. The Committee then presents the compensation decisions for the Chief Financial Officer to the independent members of the IBM Board of Directors for ratification.

  60. 3. Setting Competitive Target Pay

    3. Setting Competitive Target Pay 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. For 2022 and 2023 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 both 2022 and 2023 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 of IBM, and accurately represents IBM’s competition for senior leadership talent. In consideration of size and complexity, IBM’s philosophy is to generally target the 50th percentile of the market for cash and total compensation. Benchmark Group:

  61. 3. Setting Competitive Target Pay

    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 broader benchmark group. Evaluation of Chairman and CEO Target Pay by the Compensation Committee The Chair of the Compensation Committee works directly with the Committee’s compensation consultant to provide a decision-making framework for use by the Committee in setting target compensation opportunities for the Chairman and CEO. The independent members of the IBM Board of Directors review and provide final approval. Evaluation of Vice Chairman and SVP Target Pay by the Chairman and CEO and the Compensation Committee The Chairman and CEO makes compensation recommendations on the Vice Chairman and SVPs’ target compensation to the Compensation Committee. The Committee evaluates all of the factors considered by the Chairman and CEO and reviews compensation summaries that tally the dollar value of all compensation and related programs, including salary, annual incentive, long-term compensation, deferred compensation, retention payments and pension benefits. These summaries provide the Committee with an understanding of how their decisions affect other compensation elements, and the impact of separation of employment or retirement. The Committee decides whether to approve or adjust the Chairman and CEO’s recommendations for the Vice Chairman and SVPs. The Committee then presents the compensation decisions for the Chief Financial Officer to the independent members of the IBM Board of Directors for ratification. Section 3: Compensation Decisions for the Chairman and CEO and Named Executive Officers

  62. 3. Setting Competitive Target Pay

    | 2022 Annual Incentive Decision for the Chairman and CEO | | | For 2022 performance, the Board approved an annual incentive payment of $3,480,000, which represented 116% of Mr. Krishna’s target opportunity and was in line with the Company incentive score. | | | In addition to overall IBM 2022 revenue performance of $60.5 billion and $10.4 billion cash from operations, the Compensation Committee noted the following achievements for Mr. Krishna, which have positioned IBM for sustained growth going forward: | | | Business Results • Consulting revenue grew 15% at constant currency*, and Software revenue grew 12% at constant currency*, including approximately 6 points from incremental external sales to Kyndryl • Recurring revenue represents about 50% of IBM revenue, with Hybrid Platform & Solutions Annual Recurring Revenue* over $13 billion exiting 2022 • Delivered consolidated free cash flow* of $9.3 billion, with a cash realization of over 100% • Ended 2022 with $8.8 billion in cash and marketable securities, up over $1 billion year-to-year Portfolio and Investment • Closed 8 strategic acquisitions in 2022, focused on strengthening our hybrid cloud capabilities in Software and Consulting | Leadership in Innovation • Deployed Osprey 433-Qubit Quantum system, significantly expanding the volume capabilities of the platform Societal Impact • Significant progress toward our goal of reducing IBM’s operational greenhouse gas emissions 65% by 2025, with a 61% reduction to date • Expanded privacy program to add AI impact assessments in response to new AI regulations Talent Development and Leadership • Focused hiring, development, and sales investments to fuel growth • Improved diversity across US Black, US Hispanic, and global Women executives • Continued best in class employee engagement |

  63. 3. Setting Competitive Target Pay

    | 2023 Compensation Decisions for the Chairman and CEO | | For 2023, the independent members of the Board made no changes to Mr. Krishna’s base salary or target annual incentive, which was just below the median target cash compensation of the 2023 benchmark group. He was granted an annual long-term incentive award valued at $17.0 million, which is the first increase since Mr. Krishna became CEO in 2020, and in line with the median of the 2023 benchmark group. This grant is comprised of 60% 2023-2025 Performance Share Units, 20% Restricted Stock Units, and 20% Stock Options. For 2023, 77% of Mr. Krishna’s annual total target compensation is at risk and subject to attainment of rigorous performance goals and IBM’s stock price performance. |

  64. 3. Setting Competitive Target Pay

    | Name | 2022 Annual Incentive Payouts(1) | | J.J. Kavanaugh | $1,665,760 | | G. Cohn | 1,832,800 | | T. Rosamilia | 1,218,060 | | M.H. Browdy | 1,466,240 |

  65. 3. Setting Competitive Target Pay

    (1) The named executive officers each had an incentive target equal to 135% of their salary for 2022. 2023 Compensation Decisions for Mr. Kavanaugh, Mr. Cohn, Mr. Rosamilia and Ms. Browdy The Committee also approved the following compensation elements for 2023: base salary, annual incentive target, Performance Share Unit (PSU), Restricted Stock Unit (RSU) and Stock Option grants under the Long-Term Performance Plan. For Long-Term Incentive Plan grants, the mix of vehicles is 60% PSUs, 20% RSUs and 20% Stock Options, which aligns with market practice. This mix provides competitive pay, while at the same time ensuring a strong link between pay and performance, and creates the right balance relative to peers with which we compete for talent. For 2023, based on the compensation decisions detailed below at target, approximately 73% of the NEOs’ (excluding the Chairman and CEO) pay is at risk.

  66. NEO 2023 PAY MIX

    | | 2023 Cash(1) | | 2023 Long-Term Incentive Awards(2) | | | | Name | Salary Rate | Annual Incentive Target | Performance Share Units | Restricted Stock Units | Stock Options | | J.J. Kavanaugh | $1,096,000 | $1,479,000 | $5,955,000 | $1,985,000 | $1,985,000 | | G. Cohn | 1,170,000 | 1,580,000 | 4,350,000 | 1,450,000 | 1,450,000 | | T. Rosamilia(3) | 894,000 | 1,206,000 | — | — | — | | M.H. Browdy | 936,000 | 1,264,000 | 3,780,000 | 1,260,000 | 1,260,000 |

  67. NEO 2023 PAY MIX

    (1) Salary increases for the Named Executive Officers, if applicable, will be effective April 1, 2023. (2) PSUs, RSUs and Stock Options will be granted on February 21, 2023 to the named executive officers, including the Chairman and the CEO. The actual number of units granted on this date will be determined by dividing the value shown above by the average of IBM’s closing stock price for the 30 active trading days prior to the date of grant. The actual number of Stock Options granted on this date will be determined by dividing the value shown by the product of (1) the average of IBM’s closing stock price for the 30 active trading days prior to the date of grant and (2) an option valuation factor of .1667 (to reflect the discounted value of Stock Options compared to full value awards). The performance period for the PSUs ends December 31, 2025, and the award will pay out in February 2026. RSUs and Stock Options will vest 25% per year on each anniversary of the date of grant. Mr. Rosamilia will retire by June 30, 2023. Section 4: Additional Information

  68. Compensation Program as it Relates to Risk

    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 program does not encourage excessive risk taking for the following reasons: • Our programs appropriately balance short- and long-term incentives, with approximately 72% of 2023 annual total target compensation for the Chairman and CEO, Vice Chairman, and SVPs as a group provided in equity. • 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 2023 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 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 has a policy that requires a clawback of cash incentive payments in the event that an executive officer’s conduct leads to a restatement of IBM’s financial results. Likewise, IBM’s equity plan has a clawback provision under which awards may be cancelled and certain gains repaid if a senior executive engages in activity that is detrimental to IBM. To further reinforce our commitment to ethical conduct, the IBM Excess 401(k) Plus 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.

  69. Equity Award 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 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 the date of grant 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 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 and CEO, Vice Chairman and SVPs are approved by the Chairman 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. 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 February 21st or the previous business day (if the 21st does not fall on a business day). 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.

  70. Ethical Conduct

    | To the extent permitted by governing law, IBM will seek to recoup any bonus or incentive paid to any executive officer if: (i) the amount of such payment was based on the achievement of certain financial results that were subsequently the subject of a restatement; (ii) the Board determines that such officer engaged in misconduct that resulted in the obligation to restate; and (iii) a lower payment would have been made to the officer based upon the restated financial results. |

  71. Hedging and Pledging Practices

    Hedging and Pledging Practices IBM has two senior leadership teams: the Performance Team and the Acceleration Team. The Performance Team consists of approximately 85 of our senior leaders who run IBM business units and geographies and includes the Chairman and CEO, Vice Chairman, and each SVP. The team is accountable for business performance and the development of cross-unit strategies. The Acceleration Team, which includes all members of the Performance Team, consists of a select group of approximately 350 executives. This team is charged with accelerating IBM’s growth through leadership initiatives to engage their teams and promote innovation, speed, and simplicity in service of our clients. IBM does not allow any member of the IBM Board of Directors or any member of the Acceleration Team, 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.

  72. 2022 Summary Compensation Table

    2022 Summary Compensation Table

  73. 2022 Summary Compensation Table

    | Name and Principal Position | | | Stock | Option | Non-Equity Incentive Plan | Change in Retention | Change in Pension | Nonqualified Deferred Compensation | All Other | | | (a) | Salary(1) | Bonus(2) | Awards(3) | Awards(4) | Compensation(5) | Plan Value(6) | Value(7) | Earnings(8) | Compensation(9)(10) | Total(11) | | Year (b) | ($) (c) | ($) (d) | ($) (e) | ($) (f) | ($) (g) | ($) (h) | ($) (h) | ($) (h) | ($) (i) | ($) (j) | | A. Krishna, Chairman and CEO | | | | | | | | | | | | 2022 | $1,500,000 | $0 | $8,927,701 | $2,033,636 | $3,480,000 | N/A | $0 | $0 | $638,738 | $16,580,075 | | 2021 | 1,500,000 | 0 | $12,605,507 | 0 | $2,940,000 | N/A | 0 | 0 | 505,452 | 17,550,959 | | 2020 | 1,352,591 | 0 | $13,159,118 | 0 | $2,181,000 | N/A | 42,806 | 0 | 274,167 | 17,009,682 | | J.J. Kavanaugh, Senior VP and CFO | | | | | | | | | | | | 2022 | $1,040,000 | $0 | $5,843,669 | $1,331,106 | $1,665,760 | $0 | $19,187 | $0 | $233,263 | $10,132,985 | | 2021 | 968,000 | 0 | 7,563,384 | 0 | 1,437,700 | 0 | 0 | 0 | 200,534 | 10,169,618 | | 2020 | 899,000 | 0 | 7,416,931 | 0 | 1,176,300 | 94,229 | 0 | 0 | 159,836 | 9,746,296 | | G. Cohn, Vice Chairman(12) | | | | | | | | | | | | 2022 | $1,170,000 | $0 | $4,707,418 | $1,072,289 | $1,832,800 | N/A | N/A | $0 | $169,418 | $8,951,925 | | 2021 | 1,170,000 | 1,000,000 | 6,180,787 | 0 | 1,548,400 | N/A | N/A | 0 | 2,417 | 9,901,604 | | T. Rosamilia, Senior Vice President (12) | | | | | | | | | | | | 2022 | $878,000 | $0 | $4,220,391 | $961,361 | $1,218,060 | $0 | $0 | $0 | $384,606 | $7,662,418 | | 2021 | 830,000 | 0 | 5,959,005 | 0 | 1,064,000 | 0 | 0 | 0 | 250,119 | 8,103,124 | | M.H. Browdy, Senior VP and General Counsel | | | | | | | | | | | | 2022 | $925,500 | $0 | $3,246,447 | $739,505 | $1,466,240 | N/A | N/A | $0 | $147,753 | $6,525,445 | | 2021 | 894,000 | 0 | 4,354,627 | 0 | 1,266,300 | N/A | N/A | 0 | 135,930 | 6,650,857 | | 2020 | 830,000 | 0 | 4,211,031 | 0 | 1,109,520 | N/A | N/A | 0 | 124,112 | 6,274,663 |

  74. 2022 Summary Compensation Table

    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 U (Stock-Based Compensation) to IBM’s 2022 Consolidated Financial Statements. (1) Amounts in this column reflect the actual salary amount paid to each named executive officer during 2022. (2) Mr. Cohn’s offer letter included a cash sign-on payment; $1,000,000 of that was paid on December 31, 2021. (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 described below, calculated in accordance with accounting guidance; these amounts reflect an adjustment for the exclusion of dividend equivalents. 2020–2022 PSUs (for subsequent years, the metrics and weightings were updated as disclosed in Section 1 of the Compensation Discussion and Analysis, but the Threshold, Target, and Max Attainment % and Payout %s remain the same for each metric)

  75. 2022 Summary Compensation Table

    | | Threshold | Target | Max* | | Metrics | Attainment % / Payout % | Attainment % / Payout % | Attainment % / Payout % | | Operating EPS (70%) | 70% / 25% | 100% / 100% | 120% / 150% | | Free Cash Flow (30%) | 70% / 25% | 100% / 100% | 120% / 150% |

  76. 2022 Summary Compensation Table

    * Note: The Relative ROIC modifier may further modify the final payout up or down by up to 20 points, based on IBM’s ROIC performance relative to broader market indices. (See the “Performance Share Unit Program” description in Section 1 of the Compensation Discussion and Analysis for additional detail on the ROIC Modifier). As a result, the total maximum number of PSUs earned could be up to 170% of the Target number. At the Maximum number, these values for Mr. Krishna would be: 2022: $11,382,727; 2021: $13,928,980; 2020: $14,540,788; for Mr. Kavanaugh: 2022: $7,450,586; 2021: $8,357,494; 2020: $8,195,713; for Mr. Cohn: 2022: $6,001,912; 2021: $6,829,751; for Mr. Rosamilia: 2022: $5,380,999; 2021: $6,584,652; for Ms. Browdy: 2022: $4,139,173; 2021: $4,811,810; 2020: $4,653,236. Amounts also include the aggregate grant date fair values of RSUs 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). All named executive officers participate in this program. The performance period is the fiscal year (January 1 through December 31, 2022). Mr. Krishna’s target was 200% of his base salary rate. All other named executive officers had an annual target of 135% of their 2022 salary rate. See column (c) of the 2022 Grants of Plan-Based Awards Table for the Threshold payout ($0), column (d) for the target payout, and column (e) for the maximum payout. (6) See the 2022 Retention Plan Narrative for a full description of the Retention Plan. Assumptions can be found immediately after the 2022 Pension Benefits Table. Although accruals under the Retention Plan stopped on December 31, 2007, changes in Retention Plan Value can occur based on changes to participants’ ages and actuarial assumptions. For 2020, 2021 and 2022, Change in Retention Plan Value for the eligible named executive officers was due to their age, changes in the discount rate, interest crediting rate, and mortality table. The change in Retention Plan Value for the eligible named executive officers resulted in negative amounts in 2022 for Mr. Kavanaugh ($169,948) and Mr. Rosamilia ($409,856) and 2021 for Mr.Kavanaugh ($17,604) and Mr. Rosamilia ($121,275). See the 2022 Pension Benefits Narrative for a full description of the Pension Plan. Assumptions can be found immediately after the 2022 Pension Benefits Table. Although accruals under the IBM Personal Pension Plan stopped on December 31, 2007, changes in Pension Value can occur based on changes to participants’ ages and actuarial assumptions. For 2020, 2021 and 2022, Change in Pension Value for the named executive officers was due to their age, 2023 Notice of Annual Meeting & Proxy Statement | 2022 Summary Compensation Table and Related Narrative 47 changes in the discount rate, interest crediting rate, and mortality table. The change in Pension Value for the named executive officers resulted in the following negative amounts: 2022 for Mr. Krishna ($51,317) and Mr. Rosamilia ($114,465); 2021 for Mr. Krishna ($5,861), Mr. Kavanaugh ($4,072) and Mr. Rosamilia ($10,820); and 2020 for Mr. Kavanaugh ($9,281). (8) IBM does not provide above-market or preferential earnings on deferred compensation. See the 2022 Nonqualified Deferred Compensation Narrative for information about deferred compensation. (9) Amounts in this column include the following for 2022: for Mr. Krishna: tax reimbursements of $36,286 and IBM contributions to defined contribution plans of $355,200; for Mr. Kavanaugh: tax reimbursements of $13,154 and IBM contributions to defined contribution plans of $198,066; for Mr. Cohn: IBM contributions to defined contribution plans of $163,104; for Mr. Rosamilia: tax reimbursements of $37,854, IBM contributions to defined contribution plans of $155,360; and for Ms. Browdy: IBM contributions to defined contribution plans of $131,508. See the 2022 Summary Compensation Table Narrative below for a description and information about these items. (10) Amounts in this column also include the following perquisites for 2022: for Mr. Krishna: personal financial planning, ground transportation, family attendance at business-related events, personal travel on company aircraft of $188,199, and other personal expenses; for Mr. Kavanaugh: personal financial planning, annual executive physical, family attendance at business-related events, and other personal expenses; for Mr. Rosamilia: personal financial planning, ground transportation, personal security, annual executive physical, family attendance at business-related events of $28,554, personal travel on company aircraft of $135,839, and other personal expenses; for Ms. Browdy: personal financial planning and other personal expenses. See the 2022 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) Mr. Cohn and Mr. Rosamilia were not named executive officers in the 2021 Proxy Statement; therefore, 2020 data is excluded for them. Mr. Cohn was hired on December 28, 2020. Mr. Rosamilia will retire from the Company by June 30, 2023.

  77. 2022 Outstanding Equity Awards at Fiscal Year-End Table

    2022 Outstanding Equity Awards at Fiscal Year-End Table

  78. 2022 Outstanding Equity Awards at Fiscal Year-End Table

    | | Option Awards | | | | | Stock Awards | | | | | | | | | | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option | | | Number of Shares or Units of Stock That Have | Market Value of Shares or Units of Stock That Have | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have | | Name | (#) | | Options | Price(2) | Expiration | | | Not Vested(3) | Not Vested(4) | | | Not Vested(5) | Not Vested(4) | | (a) | Exercisable | Unexercisable(1) | (#) | ($) | Date | Type of | Grant | (#) | ($) | Type of | Grant | (#) | ($) | | Grant Date | (b) | (c) | (d) | (e) | (f) | Award | Date | (g) | (h) | Award | Date | (i) | (j) | | A. Krishna | 0 | 144,537 | N/A | $124.51 | 02/20/2032 | | | | | | | | | | | | | | | | RRSU | 12/11/18 | 33,328 | $4,695,582 | RPSU | 12/17/19 | 91,286 | $12,861,285 | | | | | | | | RSU | 06/07/19 | 4,022 | 566,660 | PSU | 06/08/21 | 63,918 | 9,005,407 | | | | | | | | RSU | 06/08/20 | 20,182 | 2,843,442 | PSU | 02/21/22 | 61,963 | 8,729,967 | | | | | | | | RSU | 06/08/21 | 25,814 | 3,636,934 | | | | | | | | | | | | RSU | 02/21/22 | 20,655 | 2,910,083 | | | | | | Total | 0 | 144,537 | | | | | | 104,001 | $14,652,701 | | | 217,167 | $30,596,659 | | J.J. Kavanaugh | | 94,606 | N/A | $124.51 | 02/20/2032 | | | | | | | | | | | | | | | | RSU | 06/07/19 | 3,889 | $547,921 | PSU | 06/08/21 | 38,351 | $5,403,272 | | | | | | | | RSU | 06/08/20 | 11,376 | 1,602,765 | PSU | 02/21/22 | 40,558 | 5,714,217 | | | | | | | | RSU | 06/08/21 | 15,489 | 2,182,245 | | | | | | | | | | | | RSU | 02/21/22 | 13,520 | 1,904,833 | | | | | | Total | 0 | 94,606 | | | | | | 44,274 | $6,237,764 | | | 78,909 | $11,117,489 | | G. Cohn | | 76,211 | N/A | $124.51 | 02/20/2032 | | | | | | | | | | | | | | | | RRSU | 12/28/20 | 23,151 | $3,261,744 | PSU | 01/04/21 | 18,990 | $2,675,501 | | | | | | | | RSU | 01/04/21 | 15,339 | 2,161,112 | PSU | 02/21/22 | 32,672 | 4,603,158 | | | | | | | | RSU | 02/21/22 | 10,891 | 1,534,433 | | | | | | Total | 0 | 76,211 | | | | | | 49,381 | $6,957,289 | | | 51,662 | $7,278,659 | | T. Rosamilia | | 68,327 | N/A | $124.51 | 02/20/2032 | | | | | | | | | | | | | | | | RSU | 06/07/19 | 3,889 | $547,921 | PSU | 06/08/21 | 30,216 | $4,257,132 | | | | | | | | RSU | 06/08/20 | 8,807 | 1,240,818 | PSU | 02/21/22 | 29,292 | 4,126,950 | | | | | | | | RSU | 06/08/21 | 12,204 | 1,719,422 | | | | | | | | | | | | RSU | 02/21/22 | 9,764 | 1,375,650 | | | | | | Total | 0 | 68,327 | | | | | | 34,664 | $4,883,811 | | | 59,508 | $8,384,082 | | M.H. Browdy | | 52,559 | N/A | $124.51 | 02/20/2032 | | | | | | | | | | | | | | | | RSU | 06/07/19 | 2,884 | $406,327 | PSU | 06/08/21 | 22,081 | $3,110,992 | | | | | | | | RSU | 06/08/20 | 6,460 | 910,149 | PSU | 02/21/22 | 22,532 | 3,174,534 | | | | | | | | RSU | 06/08/21 | 8,918 | 1,256,457 | | | | | | | | | | | | RSU | 02/21/22 | 7,511 | 1,058,225 | | | | | | Total | 0 | 52,559 | | | | | | 25,773 | $3,631,158 | | | 44,613 | $6,285,526 |

  79. 2022 Outstanding Equity Awards at Fiscal Year-End Table

    Type of Award: PSU = Performance Share Unit RPSU = Retention Performance Share Unit RSU = Restricted Stock Unit RRSU = Retention Restricted Stock Unit (1) The stock option awards granted vest 25% per year on the first through fourth anniversaries of the respective grant dates. (2) The exercise prices shown in this column are equal to 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 2022 Outstanding Equity Awards at Fiscal Year-End Table are unvested RSU and RRSU awards. See the 2022 Compensation Discussion and Analysis and the 2022 Summary Compensation Table for additional information on these types of awards. Mr. Krishna’s and Mr. Cohn’s RRSU awards vest on the anniversary of the grant date in 2023 according to the vesting schedule in the table below, provided they are an employee of IBM on each vesting date. The Vesting Schedule for Unvested RSUs table below shows the vesting schedules for these outstanding awards. In 2019, 2020 and 2021, each named executive officer other than Mr. Cohn received RSU awards that vest 25% per year on the first through the fourth anniversaries of the grant date (Mr. Cohn was hired at the end of 2020, so his RSU granted in January 2021 vests 25% per year on the first through the fourth anniversaries of the grant date). In 2022 each named executive officer received RSU awards that vest 25% per year on the first through the fourth 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 2022 fiscal year ($140.89). The amounts shown in column (i) of the 2022 Outstanding Equity Awards at Fiscal Year-End Table are PSU and RPSU awards that have not yet vested. See the 2022 Compensation Discussion and Analysis and the Summary Compensation Table Narrative for additional information on PSU and RPSU awards. The Vesting Schedule for Unvested PSUs and RPSUs table below shows the vesting schedules for these outstanding PSU and RPSU awards (reflecting Target payout). PSUs and RPSUs for all Named Executive Officers are paid out in February following the end of the respective performance period. 522023 Notice of Annual Meeting & Proxy Statement | 2022 Outstanding Equity Awards at Fiscal Year-End Table and Related Narrative

  80. 2022 Option Exercises and Stock Vested Table

    2022 Option Exercises and Stock Vested Table

  81. 2022 Option Exercises and Stock Vested Table

    | | 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 | 196,477 | $27,919,807 | | J.J. Kavanaugh | 0 | 0 | 45,165 | 6,372,901 | | G. Cohn | 0 | 0 | 40,617 | 5,721,214 | | T. Rosamilia | 0 | 0 | 36,725 | 5,182,916 | | M.H. Browdy | 0 | 0 | 26,820 | 3,785,050 |

  82. 2022 Option Exercises and Stock Vested Table

    (1) Amounts shown in these columns reflect PSU, RPSU, RSU, and RRSU awards that vested during 2022. The PSU and RPSU award for the 2020-2022 performance period vested on December 31, 2022, and paid out to each named executive officer on February 1, 2023; the value of this PSU award was determined by multiplying the number of shares by the closing price of IBM common stock on the vesting date ($140.89). See the Compensation Discussion and Analysis and the 2022 Summary Compensation Table for details on these types of awards.

  83. Pay Ratio

    Pay Ratio The ratio of the CEO’s annual total compensation to that of the median employee’s annual total compensation is 271:1. This ratio is based on annual total compensation of $16,580,075 for the CEO (as reported in the Summary Compensation Table) and $61,242 for the median employee. The base salary for the median employee was $45,197. The median employee used for the pay ratio disclosure was determined as of October 1, 2021 using annual base pay for IBM employees on that date; all foreign currencies were converted to U.S. dollars. 2023 Notice of Annual Meeting & Proxy Statement | 2022 Outstanding Equity Awards at Fiscal Year-End Table and Related Narrative 53 2022 Retention Plan Narrative

  84. Material Terms and Conditions: 1995 Retention Plan

    Material Terms and Conditions: 1995 Retention Plan • The benefits provided under the Retention Plan for Mr. Kavanaugh are 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 only if a participant terminates employment, becomes disabled or dies on or after meeting the early retirement age and service requirement, holds an executive-level position immediately prior to termination or death, and has final average pay of at least $160,000 immediately prior to termination, disability or death. • The benefit provided under the 1995 Retention Plan is payable only 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). • 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: • 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. For example, if a participant terminates at age 59, the benefit is reduced by 3%, at age 58, by 7%, and at age 57, by 11%. • The benefit of a participant in the 1995 Retention Plan will not be less than the benefit that would be provided if the participant were in the 1999 Retention Plan, as described in the next subsection.

  85. Material Terms and Conditions: 1999 Retention Plan

    Material Terms and Conditions: 1999 Retention Plan • The benefits provided under the Retention Plan to Mr. Rosamilia are determined under the Retention Plan formula in effect on and after the July 1, 1999 amendment (1999 Retention Plan). • Benefits are available under the 1999 Retention Plan if a participant holds an executive-level position immediately prior to termination or death, has final average pay in excess of $405,400 on both January 1, 2007 and immediately prior to termination or death, and either: — Terminates employment for any reason other than cause or dies, in each case after attaining age 60 and completing at least five years of service; or Terminates employment for any reason other than cause or dies, in each case after attaining age 55 and completing at least 15 years of service and either becomes disabled (as determined under IBM’s long-term disability plan), or if approved by the Board in the case of the two highest 542023 Notice of Annual Meeting & Proxy Statement | 2022 Retention Plan Narrative paid officers (and if approved by the Compensation Committee and the chairman and chief executive officer in the case of any other officer of IBM). • If the participant terminates employment after attaining age 60 and completing at least five years of service, the 1999 Retention Plan benefit expressed as an annual single life annuity is equal to: • In no event will the sum of the amounts in (1) and (2) exceed 65% times final average pay times a fraction (no greater than 1), the numerator of which is the participant’s years of service and the denominator of which is 35. • A participant who terminates employment after attaining age 55, but prior to attaining age 60, who completes at least 15 years of service, and who receives Compensation Committee and chairman and chief executive officer approval (or Board approval in the case of the two highest paid officers) as described above, will receive a reduced single life annuity. The reduced single life annuity will be determined by reducing the sum of the amounts specified in (1) and (2) by 0.5% for each month that the benefit commencement date precedes age 60.

  86. Compensation Elements Included in Calculations

    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.

  87. Funding

    Funding • The Retention Plan is unfunded and maintained as a book reserve (notional) account. • No funds are set aside in a trust or otherwise; participants in the Retention Plan are general unsecured creditors of IBM regarding the payment of their Retention Plan benefits.

  88. Policy Regarding Extra Years of Credited Service

    Policy Regarding Extra Years of Credited Service • Generally, a participant’s years of credited service for benefits are based on the years an employee participated in the IBM Personal Pension Plan through December 31, 2007, the date accrual of future benefits stopped.

  89. Available Forms of Payment

    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 termination of employment (subject to a six-month delay for “specified employees” as required under Section 409A of the Internal Revenue Code). Lump sum payments are not available under the Retention Plan. • A participant may elect to receive his or her benefit in the form of a single life annuity or in certain other actuarially equivalent forms of payment.

  90. Annual Retention Plan Benefit

    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 each eligible named executive officer is detailed in the table below.

  91. Annual Retention Plan Benefit

    | Name | Annual Retention Plan Benefit at Earliest Unreduced Retirement Age | | J.J. Kavanaugh | $11,785 | | T. Rosamilia | 84,832 |

  92. Present Value of Accumulated Benefit

    Present Value of Accumulated Benefit • The present value of accumulated benefit shown in the 2022 Retention Plan Table below is the value as of December 31, 2022 of the annual Retention Plan benefit that was earned as of December 31, 2007. • The earliest unreduced retirement age is the earliest age an eligible named executive officer may start receiving the Retention Plan benefit without a reduction for early commencement. As of December 31, 2022, Mr. Rosamilia reached the earliest unreduced retirement age. Because Mr. Kavanaugh did not attain age 60 by December 31, 2022, the earliest unreduced retirement age is his age on the first day of the month that coincides with or next follows the attainment of age 60. • Certain assumptions were used to determine the present value of the annual accumulated Retention Plan benefit that is payable beginning at the earliest unreduced retirement age. Those assumptions are described immediately following the 2022 Pension Benefits Table.

  93. Annual Pension Benefits

    Annual Pension Benefits • The annual pension benefit that was earned as of December 31, 2007, 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 Rosamilia will receive a lump sum payment for their Nonqualified Plan benefits, no amount is represented for them in the Nonqualified Plan column below:

  94. Annual Pension Benefits

    | Name | Annual Pension Benefit at Normal Retirement Age | | | | | Qualified Plan | Nonqualified Plan | Total Benefit | | A. Krishna | $23,347 | N/A | $23,347 | | J.J. Kavanaugh | 21,043 | N/A | 21,043 | | T. Rosamilia | 34,552 | N/A | 34,552 |

  95. 2022 Pension Benefits Table

    2022 Pension Benefits Table As noted in the General Description and Purpose to the 2022 Retention Plan Narrative, the 2022 Pension Benefits Table does not include amounts reflected in the 2022 Retention Plan Table.

  96. 2022 Pension Benefits Table

    | | | Number of Years | Present Value of | Payments During | | | | Credited Service(1) | Accumulated Benefit(2) | Last Fiscal Year | | Name (a) | Plan Name (b) | (#) (c) | ($) (d) | ($) (e) | | A. Krishna | Qualified Plan | 17 | $227,829 | $0 | | | Nonqualified Plan | | 80,671 | 0 | | | Total Benefit | | $308,500 | $0 | | J.J. Kavanaugh | Qualified Plan | 12 | $169,254 | $0 | | | Nonqualified Plan | | 72,392 | 0 | | | Total Benefit | | $241,646 | $0 | | T. Rosamilia | Qualified Plan | 25 | $377,922 | $0 | | | Nonqualified Plan | | 144,977 | 0 | | | Total Benefit | | $522,899 | $0 |

  97. 2022 Pension Benefits Table

    (1) Reflects years of credited service as of December 31, 2007, which was the date accruals under the Qualified Plan and the Nonqualified Plan stopped. Each of the named executive officers in this table has 15 additional years of service with IBM after that date. (2) While the accruals under the Qualified Plan and the Nonqualified Plan stopped on December 31, 2007, the value of the Qualified Plan and Nonqualified Plan benefits for the eligible named executive officers will continue to change based on their ages, annuity conversion rates, and the assumptions used to calculate the present value of the accumulated benefit. Assumptions to determine present value as of December 31, 2022 for each eligible named executive officer: • Measurement date: December 31, 2022 • Interest rate for present value: 5.3% • To determine Personal Pension Account benefit: — Interest crediting rate: 4.9% for 2023 and 4.40% for 2024 and after — Interest rate to convert Personal Pension Account balance to single life annuity: 4.4567% for years 1 – 5, 5.2367% for years 6 – 20, and 5.1467% for year 21 and after — Mortality table to convert Personal Pension Account balance to single life annuity is 2023 Pension Protection Act Optional Combined Unisex Table • Mortality (pre-commencement): None • Mortality (post-commencement): — Base Table: Modified PRI-2012 White Collar sex-distinct tables for retirees adjusted by a factor of 0.762 with improvement from 2012 to December 31, 2022. — Improvement Scale: A modified Scale MP-2021 projection table. • 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 is calculated based on credited service and compensation history as of December 31, 2007 • In the case of the qualified Personal Pension Account formula, the benefit is payable as a 90% lump sum/10% annuity for Messrs. Krishna and Kavanaugh, and a 50% lump sum/50% annuity for Mr. Rosamilia, 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 Rosamilia 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 • 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, 2021: • The column titled Change in Pension Value in the 2022 Summary Compensation Table quantifies the change in the present value of the pension benefit from December 31, 2021 to December 31, 2022 • To determine the present value of the pension benefit as of December 31, 2021, the same assumptions that are described above to determine the present value as of December 31, 2022 were used, except (1) a 2.6% interest rate, Modified RP-2014 White Collar sex-distinct annuitant table with adjustments to 2006 by backing out MP-2014 improvement and further adjusting the mortality rates by a factor of 1.016, and Modified MP-2021 improvement scale, and (2) to determine the Personal Pension Account benefit, the following were used: — Interest crediting rate: 1.1% for 2022 and after — Interest rate to convert Personal Pension Account balance to single life annuity: 0.7433% for years 1 — 5, 2.5967% for years 6 — 20, and 3.1133% for year 21 and after Mortality table for Personal Pension Account balance conversion: 2022 Pension Protection Act Optional Combined Unisex Table 582023 Notice of Annual Meeting & Proxy Statement | 2022 Pension Benefits Narrative 2022 Nonqualified Deferred Compensation Narrative IBM Excess 401(k) Plus Plan — U.S.

  98. IBM Automatic Contributions

    IBM Automatic Contributions • Effective January 1, 2008, IBM credits automatic contributions to the Basic Account of each eligible participant. The automatic contributions equal a percentage of the sum of: (i) the amount the participant elects to defer under the Excess 401(k) Plus Plan; and (ii) the participant’s eligible compensation after reaching the Internal Revenue Code compensation limits. The automatic contribution percentage for a participant is the participant’s automatic 2023 Notice of Annual Meeting & Proxy Statement | 2022 Nonqualified Deferred Compensation Narrative 59 contribution percentage under the IBM 401(k) Plus Plan. Generally, the percentage is 2% or 4% if the participant was hired or rehired by IBM U.S. before January 1, 2005 (depending on the participant’s pension plan eligibility on December 31, 2007), or 1% if the participant was hired or rehired by IBM U.S. on or after January 1, 2005 and completes one year of service. For purposes of calculating the automatic contributions under the IBM 401(k) Plus Plan, the participant’s eligible pay excludes the amount the participant elects to defer under the Excess 401(k) Plus Plan. The automatic contribution percentage is; 2% for Messrs. Krishna, Kavanaugh and Rosamilia; and 1% for Mr. Cohn and Ms. Browdy. • For 2022, matching contributions and automatic contributions are made once annually at the end of the year. In order to receive such IBM contributions each year, a participant must have completed the service requirement, and must be employed on December 15 of the plan year. However, if a participant separates from service (including going on long-term disability) prior to December 15, and the participant has: — At least 30 years of service; — At least 15 years of service and is at least age 55; — At least 5 years of service and is at least age 62; or — At least 1 year of service and is at least age 65; or, if a participant dies prior to December 15 in a given year, then the participant will be eligible to receive such IBM contributions as soon as practicable following separation from service. Effective January 1, 2023, matching contributions and automatic contributions are made each pay period for participants who have met the service requirement and are otherwise eligible for IBM contributions.

  99. IBM Transition Credits

    IBM Transition Credits • Effective for the period of January 1, 2008 through June 30, 2009, IBM credited transition credits to an eligible participant’s Basic Account for those employees who were receiving transition credits in their Personal Pension Account under the Qualified Plan as of December 31, 2007. Under the terms of the IBM 401(k) Plus Plan, Messrs. Krishna, Kavanaugh and Rosamilia were eligible to receive transition credits.

  100. Earnings Measures

    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 401(k) Plus Plan. • The available investment choices are the same as the primary investment choices available under the IBM 401(k) Plus Plan, which are as follows (with 2022 annual rates of return indicated for each): — Target Retirement 2020 Fund (-15.13%) — Target Retirement 2025 Fund (-15.90%) — Target Retirement 2030 Fund (-16.64%) — Target Retirement 2035 Fund (-17.38%) — Target Retirement 2040 Fund (-18.17%) — Target Retirement 2045 Fund (-18.60%) — Target Retirement 2050 Fund (-18.72%) — Target Retirement 2055 Fund (-18.70%) — Target Retirement 2060 Fund (-18.66%) — Target Retirement 2065 Fund (-18.62%) — Income Plus Fund (-14.63%) — Conservative Fund (-15.73%) — Moderate Fund (-17.08%) — Aggressive Fund (-18.60%) — Interest Income Fund (2.31%) — Inflation Protected Bond Fund (-11.77%) — Total Bond Market Fund (-13.28%) — High Yield & Emerging Markets Bond Fund (-11.47%) — Total Stock Market Index Fund (-19.46%) — Total International Stock Market Index Fund (-15.75%) — Global Real Estate Stock Index Fund (-25.64%) — Long-Term Corporate Bond Fund (-25.17%) — Large Company Index Fund (-18.12%) — Large-Cap Value Index Fund (-7.56%) — Large-Cap Growth Index Fund (-29.15%) — Small/Mid-Cap Stock Index Fund (-25.30%) — Small-Cap Value Index Fund (-14.45%) — Small-Cap Growth Index Fund (-26.25%) — European Stock Index Fund (-14.64%) — Pacific Stock Index Fund (-13.27%) — Emerging Markets Stock Index Fund (-17.74%) — Real Estate Investment Trust Index Fund (-24.53%) — International Real Estate Index Fund (-27.63%) — IBM Stock Fund (10.61%)* * Performance includes dividend equivalent reinvestment • 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 401(k) Plus 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. 602023 Notice of Annual Meeting & Proxy Statement | 2022 Nonqualified Deferred Compensation Narrative Aggregate earnings on Deferred IBM Shares during the last fiscal year, as reported in column (d) of the 2022 Nonqualified Deferred Compensation Table, are calculated as the change in the price of IBM’s common stock between December 31, 2021 and December 31, 2022 for all Deferred IBM Shares. • Aggregate earnings reflect an $8 quarterly administrative fee.

  101. Payouts, Withdrawals, and Other Distributions

    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, 2022, Messrs. Krishna, Kavanaugh and Rosamilia 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. • 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 2022, 50% of this limit was $152,500), 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. Further, within the Basic Account and the Deferred Shares Account, 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. • At December 31, 2022, the named executive officers had the following distribution elections on file: — Mr. Krishna — Lump sum paid in February of the year following separation for pre-2005 amounts, and immediate lump sum for post-2004 amounts. — Mr. Kavanaugh — 2 annual installments for pre-2005 amounts, and lump sum in February of the year following separation for post-2004 amounts. — Mr. Cohn — 10 annual installments for all amounts. — Mr. Rosamilia — lump sum in February of the year following separation for all amounts. — Ms. Browdy — immediate lump sum following separation for all amounts. • Deferred IBM Shares are distributed only in the form of shares of IBM’s common stock. 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. 2023 Notice of Annual Meeting & Proxy Statement | 2022 Nonqualified Deferred Compensation Narrative 61

  102. 2022 Nonqualified Deferred Compensation Table

    2022 Nonqualified Deferred Compensation Table

  103. 2022 Nonqualified Deferred Compensation Table

    | | | Executive Contributions | | Registrant Contributions | Aggregate Earnings in | Aggregate Withdrawal/ | Aggregate Balance at | | | | in Last FY(1) | | in Last FY(2) | Last FY(3) | Distributions | Last FYE(4) | | Name (a) | Plan | ($) (b) | | ($) (c) | ($) (d) | ($) (e) | ($) (f) | | A. Krishna | Basic Account | $248,100 | Match | $248,100 | $(242,875) | $0 | $6,512,707 | | | | | Automatic | 82,700 | | | | | | Deferred IBM Shares | 0 | | 0 | 0 | 0 | 0 | | | Total | $248,100 | | $330,800 | $(242,875) | $0 | $6,512,707 | | J.J. Kavanaugh | Basic Account | $260,000 | Match | $130,362 | $(1,113,187) | $0 | $6,226,839 | | | | | Automatic | 43,454 | | | | | | Deferred IBM Shares | 0 | | 0 | 1,077 | 0 | 20,992 | | | Total | $260,000 | | $173,816 | $(1,112,110) | $0 | $6,247,831 | | G. Cohn | Basic Account | $920,750 | Match | $120,670 | $(43,741) | $0 | $1,022,293 | | | | | Automatic | 24,134 | | | | | | Deferred IBM Shares | 0 | | 0 | 0 | 0 | 0 | | | Total | $920,750 | | $144,804 | $(43,741) | $0 | $1,022,293 | | T. Rosamilia | Basic Account | $98,220 | Match | $98,220 | $370,561 | $0 | $4,895,928 | | | | | Automatic | 32,740 | | | | | | Deferred IBM Shares | 0 | | 0 | 0 | 0 | 0 | | | Total | $98,220 | | $130,960 | $370,561 | $0 | $4,895,928 | | M.H. Browdy | Basic Account | $94,340 | Match | $94,340 | $90,154 | $0 | $2,092,459 | | | | | Automatic | 18,868 | | | | | | Deferred IBM Shares | 0 | | 0 | 0 | 0 | 0 | | | Total | $94,340 | | $113,208 | $90,154 | $0 | $2,092,459 |

  104. 2022 Nonqualified Deferred Compensation Table

    (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 2022 Summary Compensation Table. These amounts are: $71,700 for Mr. Krishna; $260,000 for Mr. Kavanaugh; $920,750 for Mr. Cohn; $34,380 for Mr. Rosamilia; and $31,025 for Ms. Browdy. (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 2022 Summary Compensation Table. The amounts reported as IBM contributions to defined contribution plans in footnote 9 to the 2022 Summary Compensation Table are larger because the amounts reported in that footnote also include IBM’s contributions to the IBM 401(k) Plus Plan. (3) None of the amounts reported in this column (d) are reported in column (h) of the 2022 Summary Compensation Table because IBM does not pay above-market or preferential earnings on deferred compensation. 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 matching and automatic 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. 622023 Notice of Annual Meeting & Proxy Statement | 2022 Nonqualified Deferred Compensation Narrative 2022 Potential Payments Upon Termination Narrative

  105. IBM Long-Term Performance Plans (LTPP)

    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) or retention Performance Share Units (RPSUs). • The LTPP and/or the named executive officers’ equity award agreements contain the following terms: — Generally, unvested Stock Options, RSUs, RRSUs, PSUs and RPSUs are cancelled upon termination; and — Vested Stock Options may be exercised only for 90 days following termination. • 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, 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 unvested PSU awards to continue to vest under their original vesting schedules. • If an executive dies, outstanding Stock Options, RSU awards and RRSU awards would vest immediately, and outstanding PSU and RPSU awards would remain outstanding and continue to vest under their original vesting schedules. If an executive becomes disabled, outstanding Stock Options, RSUs and RRSUs would continue to vest under their original vesting schedules, and outstanding PSUs and 2023 Notice of Annual Meeting & Proxy Statement | 2022 Potential Payments Upon Termination Narrative 63 RPSUs 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. — 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 for our named executive officers: • 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; and • The payout has been approved by appropriate senior management, the Compensation Committee or the Board, in their discretion. — The Chairman 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 2022 Potential Payments Upon Termination Table assumes the following: — Amounts shown include the payout of the 2020 PSU awards calculated using the actual performance achieved for the 2020-2022 performance period and the 2022 fiscal year-end closing price of $140.89 for IBM common stock; and — Outstanding 2021 and 2022 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 2019, 2020 and 2021 RSU awards, if the required retirement criteria is met, at the fiscal year-end closing price of $140.89 for IBM common stock because the one-year service requirement from grant has been completed; and — Outstanding 2022 RSU and Option awards are not included because the required service of at least one year since the award date of grant has not been completed. • 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 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.

  106. IBM Supplemental Executive Retention Plan (Retention Plan)

    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 2022 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 2022 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 2023. • 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.

  107. IBM Excess 401(k) Plus Plan

    IBM Excess 401(k) Plus Plan • As described in the 2022 Nonqualified Deferred Compensation Narrative, payment of the named executive officers’ Excess 401(k) Plus Plan accounts (Basic Accounts and any Deferred IBM Shares) is triggered by resignation, retirement or involuntary termination. • With respect to IBM matching and automatic contributions made to a participant’s account after March 31, 2010, if a participant engages in activity that is detrimental to IBM, the Excess 401(k) Plus 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 2022 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. 642023 Notice of Annual Meeting & Proxy Statement | 2022 Potential Payments Upon Termination Narrative 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.

  108. Retiree Medical and Life Insurance

    Retiree Medical and Life Insurance

  109. General Description

    General Description Benefits under IBM’s retiree medical and life insurance programs are triggered by a named executive officer’s retirement, as described below. IBM maintains the Retiree Benefits Plan, the Future Health Account, Access to Group Health Care Coverage and the Retiree Group Life Insurance Plan. Eligibility for a particular program is dependent upon date of U.S. hire, age, and years of service at termination. Future coverage under such programs remains subject to IBM’s right to amend or terminate the plans at any time. The named executive officers would not have been eligible for the Retiree Benefits Plan following a separation from service on the last business day of the fiscal year end because they had not met the eligibility requirements.

  110. IBM Future Health Account (FHA)

    IBM Future Health Account (FHA) • Amounts credited by IBM to a hypothetical account may be used to offset the cost of eligible medical, dental, and vision insurance coverage for former employees and their eligible dependents. • Generally, all regular full-time or part-time U.S. IBM employees who meet the following criteria are eligible to use amounts from the account for these purposes: — Hired before January 1, 2004; — Not within five years of earliest retirement eligibility under the prior IBM Retirement Plan on June 30, 1999; and — At termination they have attained 30 years of service (regardless of age) and were eligible for an opening balance on July 1, 1999, or have attained at least age 55 with 15 years of service. An employee was eligible for an opening balance on July 1, 1999 if the employee was at least age 40 and completed at least one year of service on June 30, 1999. • Messrs. Krishna, Kavanaugh, and Rosamilia would have been eligible for this benefit following a separation from service on the last business day of the fiscal year end.

  111. Access to Group Health Care Coverage

    Access to Group Health Care Coverage • Eligible employees may purchase retiree health care coverage under an IBM-sponsored retiree medical option. The cost of this coverage is paid solely by the employee, but the coverage is priced at IBM retiree group rates. • Generally, all regular full-time or part-time U.S. IBM employees who meet the following criteria are eligible to purchase such coverage: — Hired on or after January 1, 2004, and meet the following age and service requirements at separation from service: • At least age 55, with at least five years of service; and either • The employee’s age and years of service equal 65; or • Withdrawal-eligible for the Future Health Account and the funds in the account have been fully depleted. — Hired prior to January 1, 2004 but are not eligible for either the IBM Retiree Benefits Plan or the Future Health Account, and at separation of service employee is at least age 55 or later, and the employee’s age and years of service equal at least 65. • Ms. Browdy would have been eligible for this benefit following a separation from service on the last business day of the fiscal year end. • Mr. Cohn would not have been eligible for this benefit following a separation from service on the last business day of the fiscal year end because he had not met the eligibility requirement noted above.

  112. 2022 Potential Payments upon Termination Table

    2022 Potential Payments upon Termination Table

  113. 2022 Potential Payments upon Termination Table

    | | | | LTPP | | | Nonqualified Deferred Compensation Excess 401(k)(6) | | | | | Annual Incentive | Stock | Stock | Retention | Basic | Deferred IBM | | | Termination | Program(2) | Options(3) | Awards(4) | Plan(5) | Account | Shares | | Name | Scenario | ($) | ($) | ($) | ($) | ($) | ($) | | A. Krishna | Termination(1) | $3,480,000 | $0 | $26,394,896 | N/A | $6,512,707(7) | $0(7) | | | For Cause | 0 | 0 | 0 | N/A | 6,181,907(7) | 0(7) | | J.J. Kavanaugh | Termination(1) | 1,665,760 | 0 | 8,202,193 | 11,592 | 5,819,898(8) | 20,992(8) | | | For Cause | 0 | 0 | 0 | 0 | 5,646,082(8) | 20,992(8) | | G. Cohn | Termination(1) | 1,832,800 | 0 | 1,147,690 | N/A | 102,229(9) | 0 | | | For Cause | 0 | 0 | 0 | N/A | 87,749(9) | 0 | | T. Rosamilia | Termination(1) | 1,218,060 | 0 | 6,503,764 | 84,832 | 4,895,928(10) | 0 | | | For Cause | 0 | 0 | 0 | 0 | 4,764,968(10) | 0 | | M.H. Browdy | Termination(1) | 1,466,240 | 0 | 4,769,690 | N/A | 2,092,459(11) | 0 | | | For Cause | 0 | 0 | 0 | N/A | 1,979,251(11) | 0 |

  114. 2022 Potential Payments upon Termination Table

    (1) Termination generally includes the following separation scenarios: resignation, retirement, and involuntary termination without cause (in all cases, assuming the executive is not entering into competitive or other activity detrimental to IBM). (2) Assumes 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 March 2023. (3) Assumes each named executive officer exercised all vested, in-the-money Stock Options at $140.89 (the fiscal year-end closing price of IBM common stock). (4) Assumes IBM released each named executive officer’s PSU award, granted in 2020 according to its policy, for the three-year performance period ending December 31, 2022. PSU awards are adjusted for performance and released in shares of IBM common stock (with any fractional shares rounded to the nearest whole share) in February in the year following the end of the performance period. While outstanding 2019, 2020 and 2021 RSU awards are included if required retirement criteria is met, 2022 RSU awards are not included because the required service of at least one year since the award date of grant has not been completed. (5) Reflects the Retention Plan benefit payable for eligible named executive officers as an immediate annual single life annuity. See the IBM Supplemental Executive Retention Plan section above for more details. (6) Estimated payments to each named executive officer were calculated using the aggregate account balance as of the last business day of the fiscal year end. See the IBM Excess 401(k) Plus Plan section above for more details. (7) The amount deferred prior to January 1, 2005 is payable in a lump sum in February 2023. The amount deferred on or after January 1, 2005 is payable in a lump sum immediately following separation. Deferred shares are paid as shares of IBM stock. For Cause, the termination payment from the Basic Account is reduced to reflect forfeiture of Match and Automatic Contribution made during the last 12 months under plan terms. See column (c) in 2022 Nonqualified Deferred Compensation Table. (8) Sum of the approximate annual amount of Basic Account deferred prior to January 1, 2005 payable for 2 years starting in February 2023 ($406,941) and the amount of the Basic Account deferred on or after January 1, 2005 payable in a lump sum in February 2023 ($5,412,957). Deferred shares are paid as shares of IBM common stock. For Cause, the termination payment from the Basic Account is reduced to reflect forfeiture of Match and Automatic Contribution made during the last 12 months under plan terms; the forfeiture causes a decrease in the payout of amounts that were deferred on or after January 1, 2005. See column (c) in 2022 Nonqualified Deferred Compensation Table. (9) Payable in an immediate lump sum following separation. For Cause, the termination payment from the Basic Account is reduced to reflect forfeiture of Match and Automatic Contribution made during the last 12 months under plan terms. See column (c) in 2022 Nonqualified Deferred Compensation Table. (10) Payable in a lump sum in February 2023. For Cause, the termination payment from the Basic Account is reduced to reflect forfeiture of Match and Automatic Contribution made during the last 12 months under plan terms. See column (c) in 2022 Nonqualified Deferred Compensation Table. (11) Payable in an immediate lump sum following separation. For Cause, the termination payment from the Basic Account is reduced to reflect forfeiture of Match and Automatic Contribution made during the last 12 months under plan terms. See column (c) in 2022 Nonqualified Deferred Compensation Table. Pay Versus Performance

  115. 2022 Potential Payments upon Termination Table

    | Year (a) | Summary Compensation Total for the Principal Executive Officer (“PEO”) | Compensation Actually Paid to the PEO | Summary Compensation Total for the Principal Executive Officer (“PEO”) | Compensation Actually Paid to the PEO | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (“NEO”s) | Average Compensation Actually Paid to Non-PEO NEOs | Value of Initial Fixed $100 Investment Based on: | | | | | | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return | Net Income (in $M) | IBM Revenue (in $M) | | | (b)(1) | (c)(1)(7) | (b)(2) | (c)(2)(7) | (d)(3) | (e)(3)(7) | (f) | (g)(4) | (h)(5) | (i)(6) | | 2022 | $16,580,075 | $23,935,007 | N/A | N/A | $8,318,193 | $10,496,901 | $128 | $115 | $1,639 | $60,530 | | 2021 | 17,550,959 | 23,798,901 | N/A | N/A | 8,706,301 | 9,116,435 | 115 | 179 | 5,743 | 57,350 | | 2020 | 17,009,682 | 13,997,217 | $21,062,593 | $15,778,831 | 12,913,982 | 10,795,062 | 99 | 132 | 5,590 | 55,179 |

  116. 2022 Potential Payments upon Termination Table

    Mr. Krishna was the PEO for all three years in the table. Amounts deducted from the Summary Compensation Table (“SCT”) total to calculate Compensation Actually Paid (“CAP”) to the PEO for the years 2022, 2021 and 2020, respectively, include ($10,961,337), ($12,605,507), and ($13,159,118) for the date of grant fair value of stock awards and stock options, as well as ($42,806) for the Change in Retention Plan Value in 2020. Amounts added to (or subtracted from) the SCT for the years 2022, 2021 and 2020, respectively also include: $14,225,360, $11,384,777 and $12,175,943 for the fair value of stock awards and stock options that were granted in the year and remain outstanding at the end of the year; $2,501,683, $5,024,645 and ($1,508,093) for the change in fair 662023 Notice of Annual Meeting & Proxy Statement | 2022 Potential Payments Upon Termination Narrative value of stock awards that were granted in prior years and still outstanding at the end of each respective year; and $1,589,226, 2,444,027 and ($478,392) for the change in fair value of stock awards that were granted in prior years and vested during each respective year. (2) Ms. Rometty was the PEO through April 5, 2020 (when she became Executive Chairman), and then retired from IBM on December 31, 2020. Amounts subtracted from the SCT total to calculate CAP to the PEO include ($12,728,348) for the date of grant fair value of stock awards in 2020, as well as ($1,600,931) for the changes in Pension and Retention Plan Values in 2020. Amounts added to (or subtracted from) the SCT for 2020 also include: $11,607,652 for the fair value of stock awards that were granted in the year and remain outstanding at the end of the year; ($1,509,067), for the change in fair value during the year of stock awards that were granted in prior years and still outstanding at the end of the year; and ($1,053,068) for the change in fair value of stock awards that were granted in prior years and vested during the year. (3) For 2021 and 2022, Mr. Kavanaugh, Mr. Cohn, Mr. Rosamilia and Ms. Browdy were the Non-PEO NEOs. For 2020, Mr. Kavanaugh, Ms. Browdy, Mr. James Whitehurst, and Dr. John Kelly were the Non-PEO NEOs. Amounts subtracted from the Average SCT total to calculate Average CAP to the Non-PEO NEOs for the years 2022, 2021 and 2020, respectively, include ($5,530,546), ($6,014,451), and ($10,018,860) for the average date of grant fair value of stock awards and stock options, as well as ($4,797) and ($175,943) for the average Changes in Pension and Retention Plan Values in 2022 and 2020 respectively. Amounts added to (or subtracted from) the Average SCT for the years 2022, 2021 and 2020, respectively also include: $7,177,407, $5,512,871 and $9,340,129 for the average fair value of stock awards and stock options that were granted in the year and remain outstanding at the end of the year; $487,843, 406,744 and ($752,872) for the average change in fair value of stock awards that were granted in prior years and still outstanding at the end of each respective year; $48,801, 504,970 and ($805,021) for the average change in fair value of stock awards that were granted in prior years and vested during each respective year; and in 2020, $293,646 for the average dollar value of dividends payable on stock awards during 2020 (related to Mr. Whitehurst’s Restricted Stock Awards assumed upon the acquisition of Red Hat). (4) Peer Group Total Shareholder return is calculated based on IBM’s Proxy Peer Group that was disclosed in the Compensation, Discussion & Analysis section of IBM’s Proxy Statement for each respective year shown in the table, weighted based on the Peer Group’s Market Capitalization as of December 31, 2019. As disclosed in IBM’s 2022 Proxy Statement, the Company updated its Peer Group in 2022 to increase the weighting of peers in the technology industry, reflect IBM’s increased orientation as a hybrid cloud and AI company, and align the 2022 Peer Group with the size and scope of IBM following the separation of Kyndryl on November 3, 2021. If IBM used the 2021 Peer Group in 2022, the cumulative Total Shareholder Return from 12/31/2019 to 12/31/2022 would have been $129 (compared to $115 for the current Peer Group). (5) Net Income in 2021 and 2020 includes the Managed Infrastructure business, which separated from IBM on November 3, 2021 as Kyndryl. Net Income from Continuing Operations, which would have excluded this business, would have been $4,712 million and $3,932 million for 2021 and 2020, respectively. Net Income in 2022 included a one-time, non-cash pension settlement charge of approximately $4.4 billion, net of tax. (6) IBM Revenue metric reflects Revenue from Continuing Operations to provide for consistent comparison before and after the separation of the Managed Infrastructure business as Kyndryl on November 3, 2021. (7) Fair value of stock awards and stock options included in Compensation Actually paid to the PEO and Average Compensation paid to the NEOs are calculated at the required measurement dates, consistent with the approach used to value the awards at the grant date as described in IBM’s Annual Report. Any changes to stock award fair values from the grant date (for current year grants) and from prior year-end (for prior year grants) are based on IBM’s updated stock price at the respective measurement dates (less the present value of foregone dividends), and updated performance metric scoring projections (if applicable). Changes to stock option fair values are based on the updated stock price at the respective measurement dates, in addition to an updated expected option term, volatility of the company’s stock over the updated expected option term, expected dividend yield, and risk-free rate assumptions. For 2022, the year-end stock option fair value increased meaningfully from the fair value on the grant date, primarily driven by an increase in IBM’s stock price and an increase in the risk-free interest rate to approximately 4% at year-end from approximately 2% on the grant date.

  117. Relationship between Compensation Actually Paid disclosed in the Pay Versus Performance table, and other table elements

    Relationship between Compensation Actually Paid disclosed in the Pay Versus Performance table, and other table elements Compensation Actually Paid (“CAP”) to Mr. Krishna and cumulative total shareholder return were both higher in 2022 and 2021, relative to 2020. As there were no changes to Mr. Krishna’s base salary, target annual incentive, or target equity grant planned value since Mr. Krishna became CEO in April 2020, the increase in PEO CAP was largely the result of the increase in IBM’s stock price over that same time period. The average NEO CAP was relatively flat over the reported period, primarily because of the change in NEOs in 2021 compared to 2020. The increase in IBM’s stock price that largely contributed to the increased PEO CAP also drove the increase in IBM’s Total Shareholder Return (“TSR”) in 2022 and in 2021. At the end of the three-year period, IBM’s cumulative TSR ended higher than the cumulative TSR of IBM’s 2022 Peer Group. While the TSR increased over the three-year period, the average NEO CAP was relatively flat for the reasons noted above. IBM’s Revenue from Continuing Operations increased in 2022 and 2021 and was directionally aligned with PEO CAP for the reported period. Net Income also increased from 2020 to 2021, directionally in line with the PEO CAP. Net Income in 2022, which included a one-time non-cash pension settlement charge of $4.4 billion (net of tax), decreased in 2022. Without this charge, 2022 Net Income would have increased from 2021 to 2022 as well. Average NEO CAP was relatively flat for the reasons noted above.

  118. Tabular List of IBM’s most important metrics that link Compensation Actually Paid to the PEO and other NEOs

    Tabular List of IBM’s most important metrics that link Compensation Actually Paid to the PEO and other NEOs We consider the list below to be IBM’s most important metrics that link compensation paid to our Named Executive Officers, as they are the key metrics that determine the payout of IBM’s Annual Incentive Plan and Performance Stock Units.

  119. Tabular List of IBM’s most important metrics that link Compensation Actually Paid to the PEO and other NEOs

    | Revenue | | Operating Cash Flow | | Diversity | | Operating EPS | | Free Cash Flow | | ROIC |

  120. Tabular List of IBM’s most important metrics that link Compensation Actually Paid to the PEO and other NEOs

    2023 Notice of Annual Meeting & Proxy Statement | Pay Versus Performance 67 Report of the Audit Committee of the Board of Directors The Audit Committee hereby reports as follows: 1. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal accounting controls. The Audit Committee, in its oversight role, has reviewed and discussed the audited financial statements with IBM’s management. 2. The Audit Committee has discussed with IBM’s internal auditors and IBM’s independent registered public accounting firm the overall scope of, and plans for, their respective audits. The Audit Committee has met with the internal auditors and independent registered public accounting firm, separately and together, with and without management present, to discuss IBM’s financial reporting process and internal accounting controls in addition to other matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB). 3. The Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers LLP (PwC) required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC its independence. 4. The Audit Committee has an established charter outlining the practices it follows. The charter is available on IBM’s website at http://www.ibm.com/investor/att/pdf/auditcomcharter.pdf. 5. IBM’s Audit Committee has policies and procedures that require the pre-approval by the Audit Committee of all fees paid to, and all services performed by, IBM’s independent registered public accounting firm. At the beginning of each year, the Audit Committee approves the proposed services, including the nature, type, and scope of service contemplated and the related fees, to be rendered by the firm during the year. In addition, pursuant to authority delegated by the Audit Committee, the Audit Committee chair may approve engagements that are outside the scope of the services and fees approved by the Audit Committee, which are later presented to the Committee. For each category of proposed service, the independent registered public accounting firm is required to confirm that the provision of such services does not impair its independence. Pursuant to the Sarbanes-Oxley Act of 2002, the fees and services provided as noted in the table below were authorized and approved by the Audit Committee in compliance with the pre-approval policies and procedures described herein. 6. Based on the review and discussions referred to in paragraphs (1) through (5) above, the Audit Committee recommended to the Board of Directors of IBM, and the Board has approved, that the audited financial statements be included in IBM’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, for filing with the Securities and Exchange Commission.