DEF 14A of International Business Machines Corp, Mar 11, 2024

DEF 14A of International Business Machines Corp

Filed Mar 11, 2024 · FY20230001104659-24-032641

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 | | Marianne C. Brown | 65 | Former Chief Operating Officer, Global Financial Solutions, Fidelity National Information Services, Inc. | 2023 | | | | | | | Thomas Buberl | 50 | Chief Executive Officer, AXA S.A. | 2020 | | | | | | | David N. Farr | 69 | Retired Chairman and Chief Executive Officer, Emerson Electric Co. | 2012 | | | | | | | Alex Gorsky | 63 | Former Chairman and Chief Executive Officer, Johnson & Johnson | 2014 | | | | | | | Michelle J. Howard | 63 | Retired Admiral, United States Navy | 2019 | | | | | | | Arvind Krishna | 61 | Chairman and Chief Executive Officer, IBM | 2020 | | | | | | | Andrew N. Liveris | 69 | Retired Chairman and Chief Executive Officer, The Dow Chemical Company | 2010 | | | | | | | F. William McNabb III | 66 | Retired Chairman and Chief Executive Officer, The Vanguard Group, Inc. | 2019 | | | | | | | Michael Miebach | 56 | Chief Executive Officer, Mastercard Incorporated | 2023 | | | | | | | Martha E. Pollack | 65 | President, Cornell University | 2019 | | | | | | | Peter R. Voser | 65 | Retired Chief Executive Officer, Royal Dutch Shell plc, and Chairman, ABB Ltd. | 2015 | | | | | | | Frederick H. Waddell | 70 | Retired Chairman and Chief Executive Officer, Northern Trust Corporation | 2017 | | | | | | | Alfred W. Zollar | 69 | Executive Advisor, Siris Capital Group, LLC | 2021 | | | | | | | | | Number of meetings held in 2023 | | 10 | 4 | 8 | 0 | |

  3. Director Nominees

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

  4. Director Nominees

    42024 Notice of Annual Meeting & Proxy Statement | Proxy Summary

  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 are 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 | Marianne C. Brown | Thomas Buberl | David N. Farr | Alex Gorsky | Michelle J. Howard | Arvind Krishna | Andrew N. Liveris | F. William McNabb III | Michael Miebach | Martha E. Pollack | 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 | Female | Male | Male | Male | Female | Male | Male | Male | Male | Female | Male | Male | Male | | Race and/or Ethnicity | White/ Caucasian | 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

    102024 Notice of Annual Meeting & Proxy Statement | IBM Board of Directors 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. Joseph R. Swedish is not a nominee for election, and his term on the Board will end in April. We are grateful to him for his many valuable contributions and will miss his participation.

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

    | | Marianne C. Brown Former Chief Operating Officer, Global Financial Solutions, Fidelity National Information Services, Inc. Director since: 2023 Age: 65 Committee: | | | | | Directors and Corporate Governance |

  14. Qualifications

    Qualifications • Global business and technology experience as chief operating officer, Global Financial Solutions, Fidelity National Information Services, Inc. • Significant expertise in IT goods and services, cybersecurity and business management • Outside board experience as a director of Northrop Grumman Corporation, The Charles Schwab Corporation, and Akamai Technologies, Inc.

  15. Relevant experience

    Relevant experience Ms. Brown, 65, served as chief operating officer of Fidelity National Information Services, Inc.’s (FIS) Global Financial Solutions organization from January 2018 to June 2019. Prior to that, Ms. Brown served as chief operating officer, Institutional and Wholesale Business of FIS, when it acquired SunGard Financial Systems. In 2014, Ms. Brown was chief operating officer of SunGard Financial Systems. In 2006, Ms. Brown was the chief executive officer and president of Omgeo LLC. Before joining Omgeo LLC, she was the chief executive officer of the Securities Industry Automation Corporation. She is a director of Northrop Grumman Corporation, The Charles Schwab Corporation, and Akamai Technologies, Inc., and served on the board of VMware, Inc. from 2019 until 2023.

  16. Relevant experience

    | | Thomas Buberl Chief Executive Officer, AXA S.A., a multinational insurance firm Director since: 2020 Age: 50 Committee: | | | | | Executive Compensation and Management Resources |

  17. 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

  18. Relevant experience

    Relevant experience Mr. Buberl, 50, 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.

  19. Relevant experience

    | | David N. Farr Retired Chairman and Chief Executive Officer, Emerson Electric Co., a diversified manufacturing and technology company Director since: 2012 Age: 69 Committee: | | | | | Audit |

  20. Relevant experience

    • 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

  21. Relevant experience

    Relevant experience Mr. Farr, 69, 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.

  22. Relevant experience

    | | Alex Gorsky Former Chairman and Chief Executive Officer, Johnson & Johnson, a global healthcare products company Director since: 2014 Age: 63 Committee: | | | | | Executive |

  23. 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

  24. Relevant experience

    Relevant experience Mr. Gorsky, 63, is the former chairman and chief executive officer of Johnson & Johnson, and one of just seven leaders to have served in the dual role of chairman and chief executive officer since the company was listed on the New York Stock Exchange in 1944. He joined Johnson & Johnson in 1988 as a sales representative with Janssen Pharmaceutica. In 2003, he was named company group chairman of the Johnson & Johnson pharmaceutical business in Europe, the Middle East and Africa. Mr. Gorsky left Johnson & Johnson in 2004 to join the Novartis Pharmaceuticals Corporation, where he served as head of the company’s pharmaceutical business in North America. Mr. Gorsky returned to Johnson & Johnson in 2008 as company group chairman for Ethicon. In early 2009, he was appointed worldwide chairman of the Surgical Care Group and member of the executive committee. In September 2009, he was appointed worldwide chairman of the Medical Devices and Diagnostics Group, and became vice chairman of the executive committee in January 2011. He was named chief executive officer and joined the board of directors in April 2012, and was named chairman of the board of directors in December 2012. Mr. Gorsky remained chief executive officer until he transitioned to executive chairman at the end of 2021. He currently sits on the boards of Apple, JPMorgan Chase and the Travis Manion Foundation, and serves on the Wharton School of the University of Pennsylvania Board of Advisors.

  25. Relevant experience

    | | Michelle Howard Retired Admiral, United States Navy Director since: 2019 Age: 63 Committee: | | | | | Audit |

  26. Relevant experience

    • 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

  27. Relevant experience

    Relevant experience Admiral Michelle J. Howard, 63, 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.

  28. Relevant experience

    | | Arvind Krishna Chairman and Chief Executive Officer, IBM Director since: 2020 Age: 61 Committee: | | | | | Executive (Chair) |

  29. 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 Arvind Krishna, 61, 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.

  30. Qualifications

    | | 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: 69 Committees: | | | | | Directors and Corporate Governance (Chair) | | | | Executive |

  31. 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

  32. Relevant experience

    Relevant experience Mr. Liveris, 69, 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 to 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 and Lucid Motors. He serves as a director of NOVONIX Limited, which has announced that he will not stand for re-election at its Annual Meeting on April 17, 2024. Additionally, Mr. Liveris is a former Executive Committee member of The Business Council, the former chairman of The Business Council and the former vice chairman of the Executive Committee of the Business Roundtable. Mr. Liveris is also a trustee of the 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.

  33. 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: 66 Committee: | | | | | Audit |

  34. 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

  35. Relevant experience

    Relevant experience Mr. McNabb, 66, 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 Co-Chair of the Board of Directors of CECP: The CEO Force for Good.

  36. Relevant experience

    | | Michael Miebach Chief Executive Officer, Mastercard Incorporated Director since: 2023 Age: 56 Committee: | | | | | Directors and Corporate Governance |

  37. Relevant experience

    • Global business and technology experience as chief executive officer of Mastercard • Affiliation with leading business and public policy associations (including the Business Roundtable, the Business Council, and the International Business Council of the World Economic Forum) • Member of the United States Council for International Business

  38. Relevant experience

    Relevant experience Mr. Miebach, 56, is the chief executive officer of Mastercard and a member of its board of directors. He joined Mastercard in 2010 to lead its Middle East and Africa operations, before becoming chief product officer in 2016. As Mastercard’s chief product officer he gained essential perspective into consumer insights as well as valuable experience in information security and innovation. Mr. Miebach became president in 2020 and then chief executive officer in 2021. Prior to joining Mastercard, Mr. Miebach held senior roles at Barclays Bank and CitiBank. Mr. Miebach is a member of the Business Roundtable, the Business Council, the U.S.-India CEO Forum, the U.S.-India Strategic Partnership Forum, the International Advisory Panel of the Monetary Authority of Singapore, the International Business Council of the World Economic Forum, and the United States Council for International Business. He sits on the board of directors for the Metropolitan Opera, and the World Resources Institute.

  39. 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: 65 Committee: | | | | | Executive Compensation and Management Resources |

  40. 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

  41. Relevant experience

    Relevant experience Dr. Pollack, 65, 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.

  42. 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: 65 Committees: | | | | | Audit (Chair) | | | | Executive |

  43. Relevant experience

    • 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

  44. Relevant experience

    Relevant experience Mr. Voser, 65, 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.

  45. Relevant experience

    | | Frederick H. Waddell Retired Chairman and Chief Executive Officer, Northern Trust Corporation, a financial services company Director since: 2017 Age: 70 Committees: | | | | | Executive Compensation and Management Resources (Chair) | | | | Executive |

  46. 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

  47. Relevant experience

    Relevant experience Mr. Waddell, 70, 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.

  48. Relevant experience

    | | Alfred W. Zollar Executive Advisor, Siris Capital Group LLC, a private equity firm Director since: 2021 Age: 69 Committee: | | | | | Directors and Corporate Governance |

  49. Relevant experience

    • Global business and leadership experience as an executive partner and executive advisor at Siris Capital Group • Deep technology experience with more than 40 years in systems and software, including as director of Red Hat • Outside board experience as a director of Nasdaq, Bank of New York Mellon, and as a former director of Public Service Enterprise Group

  50. Relevant experience

    Relevant experience Mr. Zollar, 69, has served as an executive advisor at Siris Capital Group, a private equity group specializing in technology and telecom investments, since March 2021; previously, Mr. Zollar was an executive partner from 2014 through March 2021. While at Siris Capital Group, Mr. Zollar has worked closely with cloud-based technology providers, leading providers of enterprise security solutions and other technology and software-as-a-service companies. He served as a director of Red Hat from 2018 until 2019 and of Public Service Enterprise Group from 2012 until 2023. He is currently a director of Nasdaq Inc. and Bank of New York Mellon Corp. He is also a member of the Executive Leadership Council and a lifetime member of the National Society of Black Engineers. Mr. Zollar retired from IBM in 2011 following a 34-year career during which he held a variety of senior management positions in IBM’s systems and software groups.

  51. Relevant experience

    | | THE BOARD RECOMMENDS YOU VOTE FOR EACH OF THE NOMINEES INTRODUCED ABOVE. |

  52. Relevant experience

    Governance and the Board Committees of the Board Members of the Audit Committee, Directors and Corporate Governance Committee, and the Executive Compensation and Management Resources Committee are non-management directors who, in the opinion of the Board, satisfy the independence criteria established by the Board, and the standards of the Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE).

  53. 2023 Director Compensation Table

    2023 Director Compensation Table

  54. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | All Other Compensation ($) | Total ($) | | (a) | (b) | (c)(1) | (d) | | Marianne C. Brown(2) | 19,444 | 6 | 19,450 | | Thomas Buberl | 350,000 | 55,278 | 405,278 | | David N. Farr | 350,000 | 119,333 | 469,333 | | Alex Gorsky | 400,000 | 169,758 | 569,758 | | Michelle J. Howard | 350,000 | 71,134 | 421,134 | | Andrew N. Liveris | 370,000 | 232,313 | 602,313 | | F. William McNabb III | 350,000 | 66,257 | 416,257 | | Michael Miebach(3) | 59,306 | 13 | 59,319 | | Martha E. Pollack | 350,000 | 80,662 | 430,662 | | Joseph R. Swedish | 350,000 | 80,069 | 430,069 | | Peter R. Voser | 380,000 | 159,908 | 539,908 | | Frederick H. Waddell | 370,000 | 117,058 | 487,058 | | Alfred W. Zollar | 350,000 | 26,740 | 376,740 |

  55. 2023 Director Compensation Table

    (1) Amounts in this column include the following: for Mr. Buberl: $55,203 of dividend equivalent payments on PFS; for Mr. Farr: $119,258 of dividend equivalent payments on PFS; for Mr. Gorsky: $169,683 of dividend equivalent payments on PFS; for Admiral Howard: $71,059 of dividend equivalent payments on PFS; for Mr. Liveris: $232,238 of dividend equivalent payments on PFS; for Mr. McNabb: $66,182 of dividend equivalent payments on PFS; for Dr. Pollack: $80,587 of dividend equivalent payments on PFS; for Mr. Swedish: $79,994 of dividend equivalent payments on PFS; for Mr. Voser: $159,833 of dividend equivalent payments on PFS; for Mr. Waddell: $109,483 of dividend equivalent payments on PFS and $7,500 contributed by the Company under Matching Grants Program; and for Mr. Zollar: $26,665 of dividend equivalent payments on PFS. (2) Ms. Brown’s term on the Board began December 2023. (3) Mr. Miebach’s term on the Board began October 2023. 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 2023 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, 2023 through June 30, 2024, at a total cost of approximately $6.2 million. The primary carrier is XL Specialty Insurance Company. 262024 Notice of Annual Meeting & Proxy Statement | Director Compensation Ownership of Securities

  56. Strategic Capital Allocation

    | For 2023 performance, the Board approved an annual incentive payment of $3,510,000 for Mr. Krishna, which was 117% of target. The payout reflects a 100% Individual Contribution Factor (ICF) and the Annual Incentive Program (AIP) pool funding at 117%. | |

  57. 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) | Annual equity grants are based on competitive positioning and vary based on individual talent factors. For PSUs, the number of units granted can be increased or decreased at the end of the three-year performance period based on IBM’s performance against predetermined targets and a relative performance metric. | | | Restricted Stock Units (RSUs) | RSUs vest over time; typically ratably over four years. | | | Stock 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. |

  58. Strategic Capital Allocation

    Other compensation elements include perquisites, which are used on a limited basis to ensure safety and productivity of executives, and retirement benefits. Full Career Performance: Retention, Pension, and Savings: Periodically, awards may be made in the form of Retention Restricted Stock Units (RRSUs) or cash awards to help retain certain executives. Vesting of RRSUs typically range from two to five years and cash awards have a clawback if an executive leaves IBM before it is earned. Eligible U.S. employees may participate in post-employment savings plans such as the IBM 401(k) Plus Plan, and a non-qualified deferred compensation plan. Effective January 1, 2024 the Company also provided a new cash balance retirement benefit in the IBM Personal Pension Plan to all eligible employees equal to 5% of eligible pay. In light of this change, the Company match and automatic contributions in the 401(k) Plan ended December 31, 2023; and effective January 1, 2024 employer contributions in the non-qualified deferred compensation savings plan moved to a consistent 5% matching contribution for all eligible employees.

  59. 2023 Metrics and Weightings

    | Annual Incentive Program (AIP) | | | | | Revenue | | Operating Cash Flow* | | | | Measures total revenue performance across the portfolio of business | | Measures our ability to reinvest and return value to shareholders | | Diversity Modifier: Affirms management’s commitment to diverse representation in our workforce that reflects the labor pool demographics of the communities in which we operate. | | | |

  60. 2023 Metrics and Weightings

    | Performance Share Unit (PSU) Program(1) | | | | | | | Revenue | | Operating EPS* | | Free Cash Flow* | | | | Measures revenue performance over three years | | Measures operating profitability on a per share basis over three years | | Measures our ability to reinvest and return value to shareholders over three years | | Performance adjusted by a relative Return on Invested Capital Modifier. | | | | | |

  61. 2023 Metrics and Weightings

    * Non-GAAP financial metrics. See Appendix A for information on how we calculate these performance metrics. (1) For PSU performance period 2020-2022, the metrics included were 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 further transparency, IBM discloses the performance attainment against financial targets for the most recent performance period, for both the Annual Incentive Program and the Performance Share Unit Program.

  62. 2023 Annual Incentive Program

    2023 Annual Incentive Program

  63. 2023 AIP Payout Results

    2023 AIP Payout Results Based on full year performance of revenue and operating cash flow, the IBM pool funding score was 117. (1) Based on AIP payout table; the 2023 leveraged score resulted in 98% for Revenue and 116% for Operating Cash Flow; for Revenue, threshold attainment is 80% with a 50% payout, target attainment and payout is 100%, maximum attainment is 110% with a 200% payout; for Operating Cash Flow, threshold attainment is 70% with a 70% payout, target attainment and payout is 100%, maximum attainment is 120% with a 200% payout. (2) Operating Cash Flow is a non-GAAP financial metric. See Appendix A for information on how we calculate this performance metric.

  64. Performance Share Unit Program

    Performance Share Unit Program The Performance Share Unit (PSU) metrics for the 2021-2023 performance period were Revenue, Operating EPS, and Free Cash Flow. Financial 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 business objectives. As discussed in prior years, in connection with the separation of Kyndryl in 2021, the Committee approved adjustments to the 2021-2023 PSU program targets in December 2021. The Committee’s longstanding practice is that the Company’s share repurchase activities have no effect on executive compensation. Actual Operating EPS results and the target are adjusted to remove the impact of any difference between the actual share count and the targeted share count. Revenue is adjusted for fluctuations in foreign currency rates in all three years. Additionally, the scoring for the PSU Program may consider extraordinary events. For the 2021-2023 performance period, 2022 and 2023 results were adjusted to exclude the impact of exiting our business in Russia. At the end of each three-year performance period, the Compensation Committee approves the determination of actual performance relative to pre-established financial 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. The PSU score is calculated as a weighted average of results against targets for Revenue (40%), Operating EPS (30%) and Free Cash Flow (30%). The calculation for the 2021-2023 performance period is shown in the table below. For the 2021-2023 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. (1) Based on PSU payout levels displayed below. (2) Non-GAAP financial metric. See Appendix A for information on how we calculate this performance metric. (3) 2021-2023 Revenue result is calculated using historical 2021 consolidated revenue, including ten months of Kyndryl discontinued operations revenue, and 2022 and 2023 revenue as reported, adjusted for fluctuations in foreign currency and impacts of separating business in Russia. (4) Non-GAAP financial metrics. 2021-2023 Operating EPS result is calculated based on 2021 historical as reported amounts adjusted to include discontinued operations. Operating EPS excludes certain separation related charges in 2021 and includes immaterial share adjustments in all three years. For 2022 and 2023, both Operating EPS and Free Cash Flow were adjusted to exclude the impact of separating business in Russia. Free Cash Flow amounts are on a consolidated basis, which includes activity from discontinued operations. See Appendix A for GAAP to non-GAAP reconciliation. 2021-2023 PSUs: Threshold, Target, and Max Attainment % and Payout %:

  65. Performance Share Unit Program

    | | Threshold | Target | Max | | Financial Metrics | Attainment % / Payout % | Attainment % / Payout % | Attainment % / Payout % | | Revenue (40%) | 70% / 25% | 100% / 100% | 120% / 150% | | Operating EPS (30%)(1) | 70% / 25% | 100% / 100% | 120% / 150% | | Free Cash Flow (30%)(1) | 70% / 25% | 100% / 100% | 120% / 150% |

  66. Performance Share Unit Program

    (1) Note: For PSU performance period 2020-2022, the metrics included were Operating EPS at 70%, Free Cash Flow at 30%, and the ROIC Modifier. Section 2: Compensation Program Governance

  67. Compensation Practices

    | | What We Do | | What We Don’t 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 | | • 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 |

  68. 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.

  69. 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.

  70. 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 2023 and 2024 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 2023 and 2024 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:

  71. 3. Setting Competitive Target Pay

    VMware was acquired by Broadcom in November 2023. 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

  72. 2023 Annual Incentive Payment Decision for the Chairman and CEO

    2023 Annual Incentive Payment Decision for the Chairman and CEO

  73. 2023 Annual Incentive Payment Decision for the Chairman and CEO

    | For 2023 performance, the Board approved an annual incentive payment of $3,510,000, which represented 117% of Mr. Krishna’s target opportunity and was in line with the Company incentive score. | In addition to overall IBM 2023 revenue performance of $61.9 billion and $13.9 billion cash from operations, the Compensation Committee noted the following achievements for Mr. Krishna, which have positioned IBM for sustained growth going forward: |

  74. 2023 Annual Incentive Payment Decision for the Chairman and CEO

    | BUSINESS RESULTS | PORTFOLIO AND INVESTMENT | | • Software revenue grew 5% year-to-year and Consulting revenue grew 6% year-to-year at constant currency* • Continued shift toward higher growth revenue, with ~75% of revenue now in Software and Consulting • Free cash flow* generation of $11.2B (+$1.9B year over year) | • Closed 9 strategic acquisitions in 2023 and invested $7B in Research, Development, & Engineering, focused on expanding Hybrid Cloud and AI capabilities • Sustainable revenue growth for third consecutive year |

  75. 2023 Annual Incentive Payment Decision for the Chairman and CEO

    | LEADERSHIP IN INNOVATION | SOCIETAL IMPACT | TALENT DEVELOPMENT AND LEADERSHIP | | • Delivered AI capabilities across the IBM technology stack through watsonx • Extended IBM’s quantum-centric supercomputing | • Reduced IBM’s operational greenhouse gas emissions by 63%, with a goal of 65% by 2025 • Centralized governance for data, privacy and AI in a single Integrated Governance Program, creating a consolidated, company-wide view enhancing regulatory compliance and time to market | • Continued best in class employee engagement • Growth in expertise levels for key skills (AI, Cloud, Security) |

  76. 2023 Annual Incentive Payment Decision for the Chairman and CEO

    | 2024 Compensation Decisions for the Chairman and CEO | | For 2024, the independent members of the Board made no changes to Mr. Krishna’s base salary, which has not changed since he became CEO in April 2020. Mr. Krishna’s target annual incentive increased to $3.5 million and he was granted an annual long-term incentive award valued at $20 million. Mr. Krishna’s target cash and total compensation are in line with the median of the 2024 benchmark group. Mr. Krishna’s long-term incentive grant is comprised of 60% 2024-2026 Performance Share Units, 20% Restricted Stock Units, and 20% Stock Options. For 2024, 78% 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. |

  77. 2023 Annual Incentive Payment Decision for the Chairman and CEO

    Non-GAAP financial metric. See Appendix A for information on how we calculate these performance metrics.

  78. 2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy The Compensation Committee also made decisions for the following named executive officers (NEOs), based on overall corporate performance as described in the Business Highlights and Executive Summary and an assessment of their individual contributions, some of which are summarized below:

  79. 2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    | JAMES J. KAVANAUGH | | Senior Vice President, Finance & Operations and Chief Financial Officer | | Optimized portfolio and drove productivity initiatives generating margin expansion in 2023. Achieved over $1.5 billion dollars in annual run-rate savings, with a path to deliver at least $3 billion in annual run-rate savings by the end of 2024. | | Delivered free cash flow* of $11.2 billion, up $1.9 billion year-to-year, which enabled returning $6 billion to stockholders through dividends and investing over $5 billion to acquire 9 companies in 2023. | | Attracted new investors to IBM through strong engagement with shareholders; including one-on-one interactions, group functions, and participation in conferences. |

  80. 2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    | ROBERT D. THOMAS | | Senior Vice President, Software & Chief Commercial Officer | | Delivered 5% Software revenue growth, increasing client demand for watsonx and growing our AI footprint. | | Bolstered Software portfolio through investment in skills and innovation, including launching watsonx and driving strategic M&A. | | Continued transformation in go-to-market model to infuse more technical and experiential selling, leveraging expanded ecosystem and strategic partnerships. |

  81. 2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    | GARY COHN | | Vice Chairman | | Contributed to increased revenue and reach by leveraging IBM’s public and private partnerships. | | Expanded IBM’s presence and brand awareness with strategic clients by deepening senior relationships. | | Served as a spokesperson in discussions with global government leaders, media, and at public events to further advance IBM’s technology point of view. |

  82. 2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    | MICHELLE H. BROWDY | | Senior Vice President and General Counsel | | Provided legal and regulatory support for IBM’s growth initiatives globally, including supporting the company’s AI agenda at the research, regulatory and field level. | | Continued to enhance IBM’s cybersecurity, privacy, data governance and AI ethics posture as regulatory focus on these issues continued to heighten around the world. | | Focused on talent development globally to ensure availability of world class legal and regulatory skills to support IBM’s growth initiatives across geographies and business lines. |

  83. 2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    Non-GAAP financial metric. See Appendix A for information on how we calculate these performance metrics. Following the process outlined above and based on business and individual performance, the Compensation Committee approved the 2023 annual incentive payouts below for these NEOs:

  84. 2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    | Name | 2023 Annual Incentive Payouts(1) | | J.J. Kavanaugh | $1,730,430 | | R.D. Thomas | 1,552,500 | | G. Cohn | 1,848,600 | | M.H. Browdy | 1,516,800 |

  85. 2023 Annual Incentive Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    (1) The named executive officers each had an incentive target equal to 135% of their salary for 2023.

  86. 2024 Compensation Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy

    2024 Compensation Decisions for Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy The Committee also approved the following compensation elements for 2024: 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 equity 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 2024, based on the compensation decisions detailed below at target, approximately 75% of the NEOs’ (excluding the Chairman and CEO) pay is at risk.

  87. NEO 2024 PAY MIX

    | | 2024 Cash | | 2024 Long-Term Incentive Awards(2) | | | | Name | Salary Rate(1) | Annual Incentive Target | Performance Share Units | Restricted Stock Units | Stock Options | | J.J. Kavanaugh | $1,170,000 | $1,580,000 | $6,150,000 | $2,050,000 | $2,050,000 | | R.D. Thomas | 1,064,000 | 1,436,000 | 5,700,000 | 1,900,000 | 1,900,000 | | G. Cohn | 1,170,000 | 1,580,000 | 4,800,000 | 1,600,000 | 1,600,000 | | M.H. Browdy | 936,000 | 1,264,000 | 3,780,000 | 1,260,000 | 1,260,000 |

  88. NEO 2024 PAY MIX

    (1) Salary increases for the Named Executive Officers, if applicable, will be effective April 1, 2024. PSUs, RSUs and Stock Options were granted on February 21, 2024 to the named executive officers, including the Chairman and the CEO. The actual number of units granted on this date are 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 are 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 0.20 (to reflect the discounted value of Stock Options compared to full value awards). The performance period for the PSUs ends December 31, 2026, and the award will pay out in February 2027. RSUs and Stock Options will vest 25% per year on each anniversary of the date of grant. Section 4: Additional Information

  89. 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 programs do not encourage excessive risk taking for the following reasons: • Our programs appropriately balance short- and long-term incentives, with approximately 75% of 2024 annual total target compensation provided in equity for the Chairman and CEO, Vice Chairman, and SVPs as a group. • Our executive compensation program pays for performance against financial targets that are set to be challenging to motivate a high degree of business performance, with an emphasis on longer-term financial success and prudent risk management. • Our incentive plans include a profit metric as a component of performance to promote disciplined progress toward financial goals. None of IBM’s incentive plans is 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 adopted a policy that requires a clawback of incentive-based compensation paid to an executive officer if there is a restatement of IBM’s financial results that would have affected the amount of incentive-based compensation, regardless of whether the executive officer’s conduct lead to the restatement. Likewise, IBM’s equity plan has a clawback provision under which awards may be cancelled and certain gains repaid if an executive engages in activity that is detrimental to IBM. To further reinforce our commitment to ethical conduct, the IBM Excess 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.

  90. 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.

  91. Hedging and Pledging Practices

    Hedging and Pledging Practices IBM has multiple corporate leadership teams, including the Performance Team. The Performance Team consists of approximately 85 of our most 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. IBM does not allow any member of the IBM Board of Directors or any member of its corporate leadership teams, including any named executive officer, to hedge the economic risk of their ownership of any IBM securities, which includes entering into any derivative transaction on IBM stock (e.g., any short-sale, prepaid variable forward contract, equity swap, collars, exchange funds) or to pledge any IBM securities at any time, which includes having IBM stock in a margin account or using IBM stock as collateral for a loan. Further, IBM does not allow any employee granted equity awards through the IBM Long-Term Incentive Plan to hedge or pledge those securities.

  92. 2023 Summary Compensation Table

    2023 Summary Compensation Table

  93. 2023 Summary Compensation Table

    | Name and Principal Position | | | Stock | Option | Non-Equity Incentive Plan | Change in Pension | Nonqualified Deferred Compensation | All Other | | | (a) | Salary(1) | Bonus(2) | Awards(3) | Awards(4) | Compensation(5) | Value(6) | Earnings(7) | Compensation(8)(9) | Total(10) | | Year (b) | ($) (c) | ($) (d) | ($) (e) | ($) (f) | ($) (g) | ($) (h) | ($) (h) | ($) (i) | ($) (j) | | A. Krishna, Chairman and CEO | | | | | | | | | | | 2023 | $1,500,000 | $0 | $11,483,809 | $3,339,560 | $3,510,000 | $23,183 | $0 | $541,874 | $20,398,426 | | 2022 | 1,500,000 | 0 | 8,927,701 | 2,033,636 | 3,480,000 | 0 | 0 | 638,738 | 16,580,075 | | 2021 | 1,500,000 | 0 | 12,605,507 | 0 | 2,940,000 | 0 | 0 | 505,452 | 17,550,959 | | J.J. Kavanaugh, Senior VP, F&O and CFO | | | | | | | | | | | 2023 | $1,088,000 | $0 | $6,704,515 | $1,949,711 | $1,730,430 | $15,264 | $0 | $203,369 | $11,691,289 | | 2022 | 1,040,000 | 0 | 5,843,669 | 1,331,106 | 1,665,760 | 19,187 | 0 | 233,263 | 10,132,985 | | 2021 | 968,000 | 0 | 7,563,384 | 0 | 1,437,700 | 0 | 0 | 200,534 | 10,169,618 | | R.D. Thomas, Senior VP and Software Chief Commercial Officer(11) | | | | | | | | | | | 2023 | $994,750 | $0 | $5,843,417 | $1,699,249 | $1,552,500 | $3,170 | $0 | $241,228 | $10,334,314 | | G. Cohn, Vice Chairman | | | | | | | | | | | 2023 | $1,170,000 | $0 | $4,897,686 | $1,424,239 | $1,848,600 | N/A | $0 | $196,565 | $9,537,090 | | 2022 | 1,170,000 | 0 | 4,707,418 | 1,072,289 | 1,832,800 | N/A | 0 | 169,418 | 8,951,925 | | 2021 | 1,170,000 | 1,000,000 | 6,180,787 | 0 | 1,548,400 | N/A | 0 | 2,417 | 9,901,604 | | M.H. Browdy, Senior VP and General Counsel | | | | | | | | | | | 2023 | $936,000 | $0 | $4,255,907 | $1,237,603 | $1,516,800 | N/A | $0 | $157,847 | $8,104,157 | | 2022 | 925,500 | 0 | 3,246,447 | 739,505 | 1,466,240 | N/A | 0 | 147,753 | 6,525,445 | | 2021 | 894,000 | 0 | 4,354,627 | 0 | 1,266,300 | N/A | 0 | 135,930 | 6,650,857 |

  94. 2023 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 2023 Consolidated Financial Statements. (1) Amounts in this column reflect the actual salary amount paid to each named executive officer during 2023. (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. At the Maximum number, these values for Mr. Krishna would be: 2023: $14,641,833; 2022: $11,382,727; 2021: $13,928,980; for Mr. Kavanaugh: 2023: $8,548,269; 2022: $7,450,586; 2021: $8,357,494; for Mr. Thomas: 2023: $7,450,269; for Mr. Cohn: 2023: $6,244,427; 2022: $6,001,912; 2021: $6,829,751; for Ms. Browdy: 2023: $5,426,231; 2022: $4,139,173; 2021: $4,811,810. Amounts also include the aggregate grant date fair values of RSU grants, if applicable, calculated in accordance with accounting guidance; these amounts reflect an adjustment for the exclusion of dividend equivalents. (4) This column reflects the grant date fair value of stock option grants, if applicable, calculated in accordance with accounting guidance. (5) Amounts in this column include payments under IBM’s Annual Incentive Program (AIP), in which all named executive officers participate. The performance period is the fiscal year (January 1 through December 31, 2023). Mr. Krishna’s target was 200% of his base salary rate. All other named executive officers had an annual target of 135% of their 2023 salary rate. In the 2023 Grants of Plan-Based Awards Table, see column (c) for the Threshold payout ($0), column (d) for the Target payout, and column (e) for the Maximum payout. (6) Although accruals under each of the Retention Plan and the IBM Personal Pension Plan stopped on December 31, 2007, for 2021, 2022 and 2023, change in Retention Plan Value and Pension Value for the eligible named executive officers was due to their age, changes in the discount rate, interest crediting rate, and mortality table. Assumptions can be found immediately after the 2023 Pension Benefits Table. Mr. Kavanaugh is the only eligible named executive officer in the Retention Plan and the change in Retention Plan Value for his benefit resulted in negative amounts in 2023 ($8,528), 2022 ($169,948), and 2021 ($17,604). The change in Pension Value for the named executive officers resulted in the following negative amounts: 2022 for Mr. Krishna ($51,317); and 2021 for Mr. Krishna ($5,861) and Mr. Kavanaugh ($4,072). (7) IBM does not provide above-market or preferential earnings on deferred compensation. See the 2023 Nonqualified Deferred Compensation Narrative for information about deferred compensation. (8) Amounts in this column include the following for 2023: for Mr. Krishna: tax reimbursements of $43,561 and IBM contributions to defined contribution plans of $398,400; for Mr. Kavanaugh: IBM contributions to defined contribution plans of $120,356; for Mr. Thomas: tax reimbursements of $38,037 and IBM contributions to defined contribution plans of $149,594; for Mr. Cohn: IBM contributions to defined contribution plans of $180,168; and for Ms. Browdy: IBM contributions to defined contribution plans of $144,134. For 2021 and 2022, the amounts in this column include Travel Accident Insurance and Group Life Insurance; such amounts are not included for 2023 because the Travel Accident Insurance and Group Life Insurance are available to all employees and does not discriminate in favor of executive officers. See the 2023 Summary Compensation Table Narrative below for a description and information about these items. (9) Amounts in this column also include the following perquisites for 2023: for Mr. Krishna: personal financial planning, ground transportation, family attendance at business-related events, personal travel on company aircraft of $46,299, and other personal expenses; for Mr. Kavanaugh: personal financial planning, family attendance at business-related events, and personal travel on company aircraft of $66,056; for Mr. Thomas: ground transportation, family attendance at business related events of $29,311, personal travel on company aircraft, and other personal expenses; for Mr. Cohn: personal travel on company aircraft, family attendance at business related events, and other personal expenses; and for Ms. Browdy: personal financial planning, ground transportation, and other personal expenses. See the 2023 Summary Compensation Table Narrative below for a description and information about the aggregate incremental cost calculations for perquisites. (10) Amounts in this column reflect the total of the following columns: Salary, Bonus, Stock Awards, Option Awards, Non-Equity Incentive Plan Compensation, Change in Pension Value, Nonqualified Deferred Compensation Earnings and All Other Compensation. Mr. Thomas was not a named executive officer in the 2022 or 2023 Proxy Statement; therefore, 2021 and 2022 data are excluded for him. 482024 Notice of Annual Meeting & Proxy Statement | 2023 Summary Compensation Table and Related Narrative

  95. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    2023 Outstanding Equity Awards at Fiscal Year-End Table

  96. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | | Option Awards | | | | | Stock Awards | | | | | | | | | | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Options (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option | | | Number of Shares or Units That Have | Market Value of Shares or Units 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 | | | | | | | | | | | | | | | 02/21/22 | 36,134 | 108,403 | N/A | $124.51 | 02/20/32 | RSU | 06/08/20 | 10,091 | $1,650,383 | PSU | 02/21/22 | 61,963 | $10,134,049 | | 02/21/23 | 0 | 146,923 | N/A | 133.00 | 02/20/33 | RSU | 06/08/21 | 17,210 | 2,814,696 | PSU | 02/21/23 | 73,476 | 12,017,000 | | | | | | | | RSU | 02/21/22 | 15,492 | 2,533,717 | | | | | | | | | | | | RSU | 02/21/23 | 24,492 | 4,005,667 | | | | | | Total | 36,134 | 255,326 | | | | | | 67,285 | $11,004,463 | | | 135,439 | $22,151,049 | | J.J. Kavanaugh | | | | | | | | | | | | | | | 02/21/22 | 23,651 | 70,955 | N/A | $124.51 | 02/20/32 | RSU | 06/08/20 | 5,688 | $930,272 | PSU | 02/21/22 | 40,558 | $6,633,261 | | 02/21/23 | 0 | 85,777 | N/A | 133.00 | 02/20/33 | RSU | 06/08/21 | 10,326 | 1,688,817 | PSU | 02/21/23 | 42,897 | 7,015,804 | | | | | | | | RSU | 02/21/22 | 10,140 | 1,658,397 | | | | | | | | | | | | RSU | 02/21/23 | 14,299 | 2,338,601 | | | | | | Total | 23,651 | 156,732 | | | | | | 40,453 | $6,616,087 | | | 83,455 | $13,649,065 | | R.D. Thomas | | | | | | | | | | | | | | | 02/21/22 | 18,395 | 55,188 | N/A | $124.51 | 02/20/32 | RRSU | 02/11/20 | 36,782 | $6,015,696 | PSU | 02/21/22 | 31,545 | $5,159,185 | | 02/21/23 | 0 | 74,758 | N/A | 133.00 | 02/20/33 | RSU | 06/08/20 | 3,673 | 600,719 | PSU | 02/21/23 | 37,387 | 6,114,644 | | | | | | | | RSU | 06/08/21 | 6,885 | 1,126,042 | | | | | | | | | | | | RSU | 02/21/22 | 7,887 | 1,289,919 | | | | | | | | | | | | RSU | 02/21/23 | 12,463 | 2,038,324 | | | | | | Total | 18,395 | 129,946 | | | | | | 67,690 | $11,070,700 | | | 68,932 | $11,273,829 | | G. Cohn | | | | | | | | | | | | | | | 02/21/22 | 19,052 | 57,159 | N/A | $124.51 | 02/20/32 | RSU | 01/04/21 | 10,226 | $1,672,462 | PSU | 02/21/22 | 32,672 | $5,343,506 | | 02/21/23 | 0 | 62,659 | N/A | 133.00 | 02/20/33 | RSU | 02/21/22 | 8,169 | 1,336,040 | PSU | 02/21/23 | 31,336 | 5,125,003 | | | | | | | | RSU | 02/21/23 | 10,446 | 1,708,443 | | | | | | Total | 19,052 | 119,818 | | | | | | 28,841 | $4,716,945 | | | 64,008 | $10,468,509 | | M.H. Browdy | | | | | | | | | | | | | | | 02/21/22 | 13,139 | 39,420 | N/A | $124.51 | 02/20/32 | RSU | 06/08/20 | 3,231 | $528,430 | PSU | 02/21/22 | 22,532 | $3,685,109 | | 02/21/23 | 0 | 54,448 | N/A | 133.00 | 02/20/33 | RSU | 06/08/21 | 5,945 | 972,305 | PSU | 02/21/23 | 27,230 | 4,453,467 | | | | | | | | RSU | 02/21/22 | 5,634 | 921,441 | | | | | | | | | | | | RSU | 02/21/23 | 9,077 | 1,484,543 | | | | | | Total | 13,139 | 93,868 | | | | | | 23,887 | $3,906,719 | | | 49,762 | $8,138,576 |

  97. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    Type of Award: PSU = 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, provided the individual remains employed through each vesting date, unless they meet certain requirements to be eligible for continued vesting. (2) The exercise prices shown in this column are equal to the 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 2023 Outstanding Equity Awards at Fiscal Year-End Table are unvested RSU and RRSU awards. See the 2023 Compensation Discussion and Analysis and the 2023 Summary Compensation Table for additional information on these types of awards. Mr. Thomas’ RRSU award vests on the anniversary of the grant date in 2024 and 2025 provided he is an employee of IBM on each vesting date. In 2020, 2021, 2022, and 2023, 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). (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 2023 fiscal year ($163.55). The amounts shown in column (i) of the 2023 Outstanding Equity Awards at Fiscal Year-End Table are PSU awards that have not yet vested. See the 2023 Compensation Discussion and Analysis and the Summary Compensation Table Narrative for additional information on PSU awards. PSUs for all Named Executive Officers are paid out in February following the end of the respective performance period. 2024 Notice of Annual Meeting & Proxy Statement | 2023 Outstanding Equity Awards at Fiscal Year-End Table and Related Narrative 53

  98. 2023 Option Exercises and Stock Vested Table

    2023 Option Exercises and Stock Vested Table

  99. 2023 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 | 206,185 | $32,883,416 | | J.J. Kavanaugh | 0 | 0 | 50,335 | 7,701,524 | | R.D. Thomas | 0 | 0 | 43,649 | 6,509,506 | | G. Cohn | 0 | 0 | 46,938 | 7,489,153 | | M.H. Browdy | 0 | 0 | 29,511 | 4,504,848 |

  100. 2023 Option Exercises and Stock Vested Table

    Amounts shown in these columns reflect PSU, RPSU, RSU, and RRSU awards that vested during 2023. The PSU and RPSU award for the 2021-2023 performance period vested on December 31, 2023, and paid out to each named executive officer on February 1, 2024; 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 ($163.55). See the Compensation Discussion and Analysis and the 2023 Summary Compensation Table for details on these types of awards. 542024 Notice of Annual Meeting & Proxy Statement | 2023 Outstanding Equity Awards at Fiscal Year-End Table and Related Narrative 2023 Retention Plan Narrative

  101. Material Terms and Conditions: 1995 Retention Plan

    erial Terms and Conditions: 1995 Retention Plan • The Retention Plan benefit for Mr. Kavanaugh is determined under the Retention Plan formula in effect prior to the July 1, 1999 amendment (1995 Retention Plan). • Benefits are available under the 1995 Retention Plan if at the time a participant separates from service they meet the early retirement age and service requirement, holds an executive-level position immediately prior to separation from service, and has final average pay of at least $160,000. • While Mr. Kavanaugh’s benefit is determined under the 1995 Retention Plan, he was partially grandfathered under this formula which means that his accruals stopped December 31, 2003 and the threshold to determine his benefit is $233,400 instead of $311,400 for fully grandfathered participants. If Mr. Kavanaugh terminates employment on or after age 60, his Retention Plan benefit expressed as an annual single life annuity is equal to: • 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. C

  102. 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 Thomas will receive a lump sum payment for their Nonqualified Plan benefits, no amount is represented for them in the Nonqualified Plan column below:

  103. Annual Pension Benefits

    | Name | Annual Pension Benefit at Normal Retirement Age | | | | | Qualified Plan | Nonqualified Plan | Total Benefit | | A. Krishna | $24,891 | N/A | $24,891 | | J.J. Kavanaugh | 21,962 | N/A | 21,962 | | R.D. Thomas | 14,605 | N/A | 14,605 |

  104. 2023 Pension Benefits Table

    2023 Pension Benefits Table As noted in the General Description and Purpose to the 2023 Retention Plan Narrative, the 2023 Pension Benefits Table does not include amounts reflected in the 2023 Retention Plan Table.

  105. 2023 Pension Benefits Table

    | | | Number of Years | Present Value of | Payments During | | | | Credited Service(1) | Accumulated Benefit | Last Fiscal Year | | Name (a) | Plan Name (b) | (#) (c) | ($) (d) | ($) (e) | | A. Krishna | Qualified Plan | 17 | $245,597 | $0 | | | Nonqualified Plan | | 86,086 | 0 | | | Total Benefit | | $331,683 | $0 | | J.J. Kavanaugh | Qualified Plan | 12 | $180,497 | $0 | | | Nonqualified Plan | | 76,413 | 0 | | | Total Benefit | | $256,910 | $0 | | R.D. Thomas | Qualified Plan | 9 | $80,293 | $0 | | | Nonqualified Plan | | 232 | 0 | | | Total Benefit | | $80,525 | $0 |

  106. 2023 Pension Benefits Table

    (1) Reflects years of credited service as of December 31, 2007. Each of the named executive officers in this table has 16 additional years of service with IBM after that date. Assumptions to determine present value as of December 31, 2023 for each eligible named executive officer: • Measurement date: December 31, 2023 • Interest rate for present value: 5.00% • To determine Personal Pension Account benefit: — Interest crediting rate: 6.4% for 2024 and 3.80% for 2025 and after — Interest rate to convert Personal Pension Account balance to single life annuity: 5.6000% for years 1-5, 5.7733% for years 6-20, and 5.7267% for year 21 and after — Mortality table to convert Personal Pension Account balance to single life annuity is 2024 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, 2023. — 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, Kavanaugh, and Thomas beginning on the first day of the month following a separation from service from IBM. The Excess Plan’s Personal Pension Plan Account formula benefit for Messrs. Krishna, Kavanaugh and Thomas is payable as a lump sum. The six-month delay under the Nonqualified Plan for “specified employees” as required under Section 409A of the Internal Revenue Code was disregarded for this purpose • 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, 2022: • The column titled Change in Pension Value in the 2023 Summary Compensation Table quantifies the change in the present value of the pension benefit from December 31, 2022 to December 31, 2023 • To determine the present value of the pension benefit as of December 31, 2022, the same assumptions that are described above to determine the present value as of December 31, 2023 were used, except (1) a 5.3% interest rate, Modified PRI-2012 White Collar sex-distinct tables for retirees adjusted by a factor of 0.762 (2) to determine the Personal Pension Account benefit, the following were used: — Interest crediting rate: 4.90% for 2023 and 4.40% for 2024 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 for Personal Pension Account balance conversion: 2023 Pension Protection Act Optional Combined Unisex Table 582024 Notice of Annual Meeting & Proxy Statement | 2023 Pension Benefits Narrative 2023 Nonqualified Deferred Compensation Narrative IBM Excess 401(k) Plus Plan — U.S.

  107. 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, 2023, Messrs. Krishna and Kavanaugh had satisfied the age and service criteria. • If the participant has satisfied the age, service, and account balance criteria at termination, but has not made a valid advance election of another form of distribution, the amount of the participant’s Basic Account that was deferred prior to January 1, 2005, is paid in a lump sum in February of the year following separation. • If the participant has satisfied the age, service, and account balance criteria at termination and has made a valid advance election, the amount of the participant’s Basic Account that was deferred prior to January 1, 2005, is paid as elected by the participant from among the following choices: 1. Lump sum upon termination; 2. Lump sum in February of the year following termination; or 3. Annual installments (beginning February 1 of the year following termination) for a number of years (between two and ten) elected by the participant. • 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 2023, 50% of this limit was $165,000), the amounts deferred on or after January 1, 2005 are distributed in a lump sum on the date installments would have otherwise begun. • Distribution elections may be changed in advance of separation, in accordance with Internal Revenue Code rules. • Distribution elections apply to both the Basic Account and the Deferred Shares Account. 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. 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. 602024 Notice of Annual Meeting & Proxy Statement | 2023 Nonqualified Deferred Compensation Narrative

  108. 2023 Nonqualified Deferred Compensation Table

    2023 Nonqualified Deferred Compensation Table

  109. 2023 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 | $279,000 | Match | $279,000 | $764,356 | $0 | $7,928,063 | | | | | Automatic | 93,000 | | | | | | Deferred IBM Shares | 0 | | 0 | 0 | 0 | 0 | | | Total | $279,000 | | $372,000 | $764,356 | $0 | $7,928,063 | | J.J. Kavanaugh | Basic Account | $45,481 | Match | $45,481 | $1,599,006 | $0 | $7,965,280 | | | | | Automatic | 48,475 | | | | | | Deferred IBM Shares | 0 | | 0 | 3,376 | 0 | 24,369 | | | Total | $45,481 | | $93,956 | $1,602,382 | $0 | $7,989,649 | | R.D. Thomas | Basic Account | $81,893 | Match | $81,893 | $165,799 | | $1,250,762 | | | | | Automatic | 41,300 | | | | | | Deferred IBM Shares | 0 | | 0 | 0 | 0 | 0 | | | Total | $81,893 | | $123,193 | $165,799 | $0 | $1,250,762 | | G. Cohn | Basic Account | $1,466,240 | Match | $133,640 | $436,883 | $0 | $3,085,784 | | | | | Automatic | 26,728 | | | | | | Deferred IBM Shares | 0 | | 0 | 0 | 0 | 0 | | | Total | $1,466,240 | | $160,368 | $436,883 | $0 | $3,085,784 | | M.H. Browdy | Basic Account | $103,612 | Match | $103,612 | $180,156 | $0 | $2,500,562 | | | | | Automatic | 20,722 | | | | | | Deferred IBM Shares | 0 | | 0 | 0 | 0 | 0 | | | Total | $103,612 | | $124,334 | $180,156 | $0 | $2,500,562 |

  110. 2023 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 2023 Summary Compensation Table. These amounts are: $70,200 for Mr. Krishna; $45,480 for Mr. Kavanaugh; $39,885 for Mr. Thomas; $0 for Mr. Cohn; and $30,300 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 2023 Summary Compensation Table. The amounts reported as IBM contributions to defined contribution plans in footnote 8 to the 2023 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 2023 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. 2024 Notice of Annual Meeting & Proxy Statement | 2023 Nonqualified Deferred Compensation Narrative 61 2023 Potential Payments Upon Termination Narrative

  111. IBM Long-Term Performance Plans (LTPP)

    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 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: • 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; 622024 Notice of Annual Meeting & Proxy Statement | 2023 Potential Payments Upon Termination Narrative 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 2023 Potential Payments Upon Termination Table assumes the following: — Amounts shown include the payout of the 2021 PSU awards calculated using the actual performance achieved for the 2021-2023 performance period and the 2023 fiscal year-end closing price of $163.55 or IBM common stock; and — Outstanding 2022 and 2023 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 2020, 2021 and 2022 RSU awards and 2022 Stock Options, if the required retirement criteria is met, at the fiscal year-end closing price of $163.55 for IBM common stock because the one-year service requirement from grant has been completed; and — Outstanding 2023 RSU awards and Stock Options are not included because the required service of at least one year since the award date of grant has not been completed. • 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. In addition, PSU payouts to executive officers are subject to clawback as described in Section 4 of the 2023 Compensation Discussion and Analysis. I

  112. 2023 Potential Payments Upon Termination Table

    2023 Potential Payments Upon Termination Table

  113. 2023 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) | $3,510,000 | $5,642,724 | $30,709,784 | N/A | $7,928,063(7) | $0 | | | For Cause | 0 | 0 | 0 | N/A | 7,556,063 (7) | 0 | | J.J. Kavanaugh | Termination(1) | 1,730,430 | 3,693,418 | 9,546,250 | $10,503 | 7,473,182 (8) | 24,369(8) | | | For Cause | 0 | 0 | 0 | 0 | 7,379,226 (8) | 24,369(8) | | R.D. Thomas | Termination(1) | 1,552,500 | 718,141 | 3,512,563 | N/A | 1,250,762(9) | 0 | | | For Cause | 0 | 0 | 0 | N/A | 1,127,569 (9) | 0 | | G. Cohn | Termination(1) | 1,848,600 | 743,790 | 2,608,950 | N/A | 308,578(10) | 0 | | | For Cause | 0 | 0 | 0 | N/A | 148,210 (10) | 0 | | M.H. Browdy | Termination(1) | 1,516,800 | 2,051,903 | 5,455,701 | N/A | 2,500,562(11) | 0 | | | For Cause | 0 | 0 | 0 | N/A | 2,376,228 (11) | 0 |

  114. 2023 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 April 2024. (3) While unvested 2022 Stock Options are included if required requirement criteria are met and assuming exercise at $163.55, unvested 2023 Stock Options are not included because the required service of at least one year since the award date of grant had not been completed. (4) Assumes IBM released each named executive officer’s PSU award, granted in 2021 according to its policy, for the three-year performance period ending December 31, 2023. 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 2020, 2021 and 2022 RSU awards are included if required retirement criteria is met, 2023 RSU awards are not included because the required service of at least one year since the award date of grant had 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, and are based on their distribution elections under the plan. 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 2024. The amount deferred on or after January 1, 2005 is payable in a lump sum immediately 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 2023 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 2024 ($516,466) and the amount of the Basic Account deferred on or after January 1, 2005 payable in a lump sum in February 2024 ($6,956,716). 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. See column (c) in 2023 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 2023 Nonqualified Deferred Compensation Table. (10) Payable in 10 annual installments starting in February 2024. 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 2023 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 2023 Nonqualified Deferred Compensation Table.

  115. Pay Ratio

    Pay Ratio The ratio of the CEO’s annual total compensation to that of the median employee’s annual total compensation is 312:1. This ratio is based on annual total compensation of $20,398,426 for the CEO (as reported in the Summary Compensation Table) and $65,463 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. 642024 Notice of Annual Meeting & Proxy Statement | 2023 Potential Payments Upon Termination Narrative Pay Versus Performance

  116. Pay Ratio

    | 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 (“Non-PEO NEOs”) | 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) | 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) | | 2023 | $20,398,426 | $32,769,352 | N/A | N/A | $9,916,713 | $14,444,039 | $156 | $167 | $7,502 | $61,860 | | 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 |

  117. Pay Ratio

    (1) Mr. Krishna was the PEO for all four years in the table. For 2023, amounts deducted from the PEO’s Summary Compensation Table (“SCT”) total to calculate Compensation Actually Paid (“CAP”) to the PEO include ($14,823,369) for the date of grant fair value of stock awards and stock options, as well as ($23,183) for Change in Pension Value in 2023. Amounts added to (or subtracted from) the PEO’s SCT total for 2023 also include: $19,555,003 for the fair value of stock awards and stock options that were granted in 2023 and which remained outstanding at the end of 2023; $2,859,266 for the change in fair value of stock awards and stock options that were granted in prior years and which remained outstanding at the end of 2023; and $4,803,209 for the change in fair value of stock awards and stock options that were granted in prior years and vested in 2023. (2) Ms. Rometty was the PEO from April 5, 2020 (when she became Executive Chairman) through her retirement from IBM on December 31, 2020. (3) The Non-PEO NEOs were, for 2023, Mr. Kavanaugh, Mr. Thomas, Mr. Cohn, and Ms. Browdy; for 2021 and 2022, Mr. Kavanaugh, Mr. Cohn, Mr. Rosamilia and Ms. Browdy; and for 2020, Mr. Kavanaugh, Ms. Browdy, Mr. James Whitehurst, and Dr. John Kelly. Amounts subtracted from the average SCT totals for the Non-PEO NEOs (“Average Non-PEO SCT”) to calculate Average CAP to the Non-PEO NEOs (“Average Non-PEO CAP”) for 2023 include ($7,003,082) for the average value at the date of grant of stock awards and stock options granted in 2023 as well as ($4,609) for the average Change in Pension and Retention Plan Values in 2023. Amounts added to (or subtracted from) the Average Non-PEO SCT to calculate Average Non-PEO CAP for 2023 also include: $8,878,110 for the average fair value of stock awards and stock options that were granted in 2023 and which remained outstanding at the end of 2023; $1,670,606 for the average change in fair value of stock awards that were granted in prior years and which remained outstanding at the end of 2023; and $625,723 for the average change in fair value of stock awards that were granted in prior years and vested during 2023. (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. Due to Broadcom’s acquisition of VMware in November 2023, Total Shareholder Return for VMware is as of November 2023. 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 2022 Peer Group) and if the 2021 Peer Group was used in 2023, the cumulative Total Shareholder Return from 12/31/2019 to 12/31/2023 would have been $182 (compared to $167 for the 2023 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 the Managed Infrastructure 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) 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. The fair value of stock awards and stock options included in CAP to the PEO and Average Non-PEO CAP 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 stock price at the respective measurement dates (less the present value of foregone dividends), and the performance metric scoring projections (if applicable) at the respective measurement dates. Changes to stock option fair values are based on IBM’s 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 each of 2022 and 2023, 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, for 2022, an increase in the risk-free interest rate to approximately 4% at year-end from approximately 2% on the grant date. 2024 Notice of Annual Meeting & Proxy Statement | Pay Versus Performance 65

  118. 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 Both CAP to Mr. Krishna and cumulative total shareholder return increased over the prior year in each of 2023, 2022 and 2021. 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 through 2022, the increase in PEO CAP was largely the result of the increase in IBM’s stock price over that same time period. In addition to IBM’s stock price increase from 2022 to 2023, the PEO CAP increase in 2023 also resulted from the increase in Mr. Krishna’s 2023 target equity grant, which was in line with the median of the 2023 benchmark group. The average Non-PEO NEO CAP increase in each of 2022 and 2023 is also largely the result of IBM’s increased stock price in each of those years. The average non-PEO CAP decreased in 2021, primarily because of the change in Non-PEO NEOs 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 2023, 2022 and 2021. While the TSR increased over the four-year period, the average non-PEO NEO CAP decreased in 2021 for the reasons noted above. IBM’s Revenue from Continuing Operations increased in 2023, 2022 and 2021 and was directionally aligned with PEO CAP for the reported period. Net Income also increased in 2023 and 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.

  119. 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 CAP to our Named Executive Officers to IBM’s performance, as they are the key metrics that determine the payout of IBM’s Annual Incentive Program and Performance Stock Units.

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

    | Revenue | | Operating Cash Flow | | Operating EPS | | Free Cash Flow |

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

    662024 Notice of Annual Meeting & Proxy Statement | Pay Versus Performance 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, 2023, for filing with the Securities and Exchange Commission.