IBM (NYSE:IBM) gave the same pitiful excuse when it missed its quarterly performance targets: sales delayed until next quarter. What about last quarters' sales that were carried over into this quarter?
CEO's in the in S&P 500 are paid millions of dollars annually to perform, not make excuses. The failed quarter is the second in a row for IBM CEO Virginia Rometty. In baseball, it's three strikes and you're out!
Ms. Rometty wasn't even on the earnings conference call to discuss the results with stakeholders. As an IBM shareholder, I find the fact that the CEO did not even show up to explain the situation totally unacceptable. I call BS!
IBM's annual sales are lower than they were over a decade ago. Granted, under CEO Sam Palmisano's tenure, IBM continued to grow earnings per share at an exceptional rate.
I read the IBM earnings transcript provided by Seeking Alpha, and I would describe the call as going through the motions at best. In the CEO's absence, CFO Mark Loughridge admitted to poor execution, then went on about weak currencies.
As a consequence of the poor results, IBM now has to lay off employees and "reposition" the business. Ms. Rometty's annual pay before any options (options typically represent the lion's share of CEO compensation) is $6.1 million. Her performance as CEO is costing people their jobs. She absolutely needs to be on the call explaining the situation to stakeholders (employees, vendors, investors and communities). There is no excuse for her not being in attendance. In fact, there are at least 6.1 million reasons for her to be present.
I mean no personal disrespect to Ms. Rometty or anybody else at IBM. I believe that S&P 500 CEO's have an enormous responsibility to perform. CEO performance or lack thereof, directly impacts the health of our nation (job creation, tax receipts, retirement benefits, ect.). I am fully in favor of unlimited CEO compensation when it is earned.
I also believe that it is very important for the investing public to call attention to CEO failures. I am in favor of giving CEOs second chances and time to turn things around, but I also believe that CEOs have to ultimately produce results.
In America, if the CEO cannot produce, the CEO must be replaced. We must continue to push our corporate leaders and hold them to account, so that our nation can remain great.
Disclosure: I am long IBM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.