IBM Execs Defer Raises

IBM Corp. Chief Executive Samuel J. Palmisano told shareholders Tuesday that the company was “taking aggressive action” to remedy problems that led to a first-quarter earnings shortfall.

The Armonk, N.Y., technology company had trouble closing deals at the end of the quarter, and “we attribute most of that to our own execution,” Palmisano said at the shareholder meeting in North Charleston, S.C.

He didn’t specify what actions might be taken but said the company was “restructuring parts of our operations to reduce bureaucracy and move more of our people and resources out to the field, closer to clients.”

Analysts expect IBM to cut jobs, particularly in lagging regions of Europe.

Palmisano did say he and about 50 other top executives had agreed to defer compensation increases “until we get our business back on track.”

He said other employees would get raises as planned.

Also Tuesday, IBM said it would allocate an additional $5 billion toward share repurchases and had increased its dividend to 20 cents per common share from 18 cents. The company gave no timetable for the buybacks.

IBM also said it had acquired Healthlink Inc., a healthcare consultancy in Houston. It didn’t disclose the purchase price.

IBM shares rose 82 cents to $75.43 on the New York Stock Exchange.