Gary Cohn
INTERNATIONAL BUSINESS MACHINESAbout Gary Cohn
Gary D. Cohn is IBM’s Vice Chairman (appointed January 5, 2021), partnering with the CEO and Executive Leadership Team on business development, client services, public advocacy, and senior client relationship management . He previously served as Assistant to the President for Economic Policy and Director of the National Economic Council (Jan 2017–Apr 2018) and was President/COO of Goldman Sachs (2006–2016); he holds a B.S. from American University and was born August 27, 1960 . IBM delivered $62.8B revenue, $13.4B cash from operations, and $12.7B free cash flow in 2024, with ~40% TSR, underpinning pay‑for‑performance programs that drive Cohn’s incentive outcomes . IBM’s AIP focused on revenue and operating cash flow, and PSUs on three‑year revenue, operating EPS, and free cash flow with a relative ROIC modifier, reinforcing strategic alignment to hybrid cloud and AI priorities .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| International Business Machines (IBM) | Vice Chairman | 2021–present | Senior external engagement; accelerates IBM’s hybrid cloud and AI strategy via client relationships and public advocacy |
| The White House (NEC) | Director, National Economic Council; Assistant to the President for Economic Policy | 2017–2018 | Led administration’s economic policy agenda; tax and regulatory reform leadership |
| Goldman Sachs | President & COO | 2006–2016 | Built and managed global businesses; deep expertise in corporate strategy and operational oversight |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Apollo Global Management (AGM) | Lead Independent Director | 2025–present | Appointed effective April 21, 2025 |
| FDIC | Systemic Resolution Advisory Committee member | Ongoing | Policy and financial system advisory role |
| Abyrx; Gro Intelligence; Indago; Nanopay; Starling | Director | Ongoing | Private company boards in tech/health/data |
| Pallas Advisors | Chairman, Advisory Board | Ongoing | National security strategic advisory |
| NYU Langone Health; NYU Tandon | Trustee/Board positions | Ongoing | Healthcare and engineering oversight roles |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,170,000 | 1,170,000 | 1,170,000 |
| Target Annual Incentive ($) | 1,579,500 (135% of salary) | 1,579,500 (135% of salary) | 1,579,500 (135% of salary) |
| Actual Annual Incentive Paid ($) | 1,832,800 | 1,848,600 | 1,738,000 |
| All Other Compensation ($) | 169,418 | 196,565 | 154,388 |
| Total Compensation ($) | 8,951,925 | 9,537,090 | 10,811,521 |
Performance Compensation
| Component | Metric | Weighting | Target/Range | 2024 Attainment/Result | Payout/Vesting |
|---|---|---|---|---|---|
| Annual Incentive Program (AIP) | Revenue | — | Threshold 80%→50% payout; Target 100%→100%; Max 110%→200% | Leveraged score 97% | AIP pool funding score 110; Cohn payout $1,738,000 |
| Annual Incentive Program (AIP) | Operating Cash Flow (non‑GAAP) | — | Threshold 70%→70%; Target 100%→100%; Max 120%→200% | Leveraged score 104% | Included in pool; individual ICF applied |
| Performance Share Units (PSUs) 2022–2024 | Revenue (currency‑adjusted) | 40% | Threshold 70%→25%; Target 100%→100%; Max 120%→150% | Final PSU program score 93; ROIC modifier 0 | Pays Feb 2025 based on program score |
| Performance Share Units (PSUs) 2022–2024 | Operating EPS (non‑GAAP) | 30% | Threshold 70%→25%; Target 100%→100%; Max 120%→150% | Included in 93 score | Pays Feb 2025 |
| Performance Share Units (PSUs) 2022–2024 | Free Cash Flow (non‑GAAP) | 30% | Threshold 70%→25%; Target 100%→100%; Max 120%→150% | Included in 93 score | Pays Feb 2025 |
| RSUs | Time‑based | — | 25% per year over four years | 2024 total vested shares (PSU/RSU/RRSU) 40,830; value $8,467,197 | Annual ratable vest; value realized on vest |
| Stock Options | Time‑based | — | 25% per year over four years; 10‑year term; exercise price = avg. high/low on grant date | 0 exercised in 2024 | Standard 10‑year exercisability; post‑termination terms vary |
2025 target LTI mix for Cohn (granted Feb 18, 2025): PSUs $6,150,000; RSUs $2,050,000; Stock Options $2,050,000; Annual incentive target $1,580,000; salary rate $1,170,000. RSUs/Options vest 25% annually; PSUs performance period ends Dec 31, 2027 and pay Feb 2028 .
Equity Ownership & Alignment
| Ownership Detail | Amount |
|---|---|
| Common Stock owned | 67,828 shares |
| Stock‑based holdings (incl. RSUs/Excess Savings Plan stock fund) | 95,206 shares |
| Acquirable within 60 days (options/RSUs vesting in window) | 58,638 shares |
| Value of common + DCEAP shares at FYE (closing price $219.83) | $14,910,704 |
| Ownership as % of shares outstanding | Less than 1/20 of 1% (individual threshold) |
| Shares pledged as collateral | None reported; IBM prohibits pledging |
Additional alignment and pressure factors:
- Stock ownership guidelines: CEO 10x salary; Other NEOs (incl. Vice Chairman) 7x salary; what counts vs. not counts disclosed (unvested awards/options excluded) .
- Group holdings: Chairman/CEO, Vice Chairman and SVPs (inclusive of NEOs) held over $187M, averaging >11x base salary as of Dec 31, 2024 .
- Hedging/pledging prohibited for executives and directors; no dividend equivalents on unearned RSUs/PSUs .
- Upcoming vesting cadence: 2025 grants made Feb 18, 2025; RSUs/Options vest annually on grant anniversaries; PSUs pay following performance period end (Feb 2028 for 2025–2027) . Outstanding PSU target units at FYE 2024: 31,336 (grant 02/21/2023) and 26,945 (grant 02/21/2024) for Cohn .
Employment Terms
- Noncompetition and nonsolicitation: Approximately 1,600 key executives (including NEOs) agree to a 12‑month noncompetition and nonsolicit; violations can trigger clawbacks/cancellations .
- Severance/change‑of‑control: IBM discloses no individual severance or change‑in‑control agreements and no excise tax gross‑ups for executive officers .
- Clawbacks: Restatement‑based clawback of incentive compensation; equity plan clawbacks for detrimental activity; Excess Savings Plan clawbacks for detrimental activity .
- Pension/SERP: Maximum lump sum available as of Jan 1, 2025 if separated Dec 31, 2024: Qualified Plan $17,963; Nonqualified Plan N/A for Cohn .
- Deferred compensation: 2024 contributions $936,000 (executive) and $133,680 (registrant); aggregate earnings $480,422; FYE balance $4,635,886 .
- Post‑termination vesting: Continued vesting eligibility generally requires age ≥55 and ≥15 years of service, plus approvals; chairman’s threshold is age ≥60 and ≥15 years. Unvested PSUs/RSUs may continue to vest; options continue to vest and remain exercisable for the remainder of term if criteria met . Given Cohn’s IBM start in 2021, he does not meet the 15‑year service criterion as of 2025, so typical retirement‑eligible continued vesting would not apply absent special approvals .
Potential Payments Upon Termination (illustrative as of FYE 2024)
| Scenario | AIP ($) | Stock Options ($) | Stock Awards ($) | Basic Account ($) |
|---|---|---|---|---|
| Termination (resignation/retirement/involuntary without cause; non‑competitive activity) | 1,738,000 | 4,992,274 | 6,679,535 | 463,589 |
| For Cause | 0 | 0 | 0 | 329,909 |
Compensation Structure Analysis
- Year‑over‑year cash vs. equity mix: Total comp rose from $8.95M (2022) to $10.81M (2024), driven by higher stock and option grant values; salary flat at $1.17M .
- Equity emphasis and performance risk: 2025 target mix reflects 60% PSUs, 20% RSUs, 20% Options for NEOs, with ~75% of target pay at risk for NEOs excluding the CEO .
- Performance metrics: AIP and PSU programs tie payouts to revenue, operating cash flow/EPS, free cash flow, and relative ROIC, aligning pay with cash generation and growth .
- Governance protections: No CIC agreements or repricing; robust clawbacks; no hedging/pledging; say‑on‑pay approval 92.2% in 2024 .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: 92.2% support, following outreach to investors owning >70% of shares that voted; compensation program reinforced by investor feedback .
- Executive ownership guidelines and compliance monitoring are overseen by the Compensation Committee; group holdings >$187M and average >11x salary indicate meaningful skin‑in‑the‑game .
Equity Ownership & Alignment Details (Vesting Schedules)
- RSUs: Typically vest ratably over four years; grants cycle date around Feb 18; Cohn received RSUs vesting 25% annually .
- Options: Vest 25% annually; 10‑year term; exercise price set at avg. high/low on grant date; 0 exercises by Cohn in 2024 .
- PSUs: Three‑year rolling targets; payout 0–150% based on financial metrics plus ±20‑point ROIC modifier; 2022–2024 program final score 93; Cohn’s PSU/RSU/RRSU vestings totaled 40,830 shares in 2024 (value $8.47M) .
Investment Implications
- Alignment and retention: High at‑risk equity mix with PSUs and cash‑flow/ROIC metrics aligns incentives to durable FCF and ROIC expansion; noncompete/nonsolicit and clawbacks reduce misalignment risk . Retirement‑eligible continued vesting requires ≥15 years of service, which Cohn does not meet, increasing retention leverage tied to ongoing performance rather than retirement treatment .
- Selling pressure and vesting overhang: Scheduled RSU/option vesting on annual grant anniversaries and PSU payouts (e.g., Feb 2028 for 2025–2027 program) create periodic supply; 2024 vested shares of 40,830 ($8.47M) indicate meaningful realized equity that could be monetized subject to insider trading windows and policy .
- Pay‑for‑performance linkage: AIP and PSUs tied to revenue, operating EPS/OCF, and FCF with ROIC modifier drive discipline on profitable growth and cash generation; 2024 IBM TSR ~40%, revenue $62.8B and FCF $12.7B support incentive payouts .
- Governance risk mitigants: No CIC agreements or option repricing; hedging/pledging prohibited; robust clawbacks; clean Section 16 compliance (no delinquent reports) reduce governance red flags .