Robert D. Thomas
INTERNATIONAL BUSINESS MACHINESAbout Robert D. Thomas
Robert D. “Rob” Thomas is Senior Vice President, Software & Chief Commercial Officer at IBM. In 2024, he led IBM Software to 9% constant-currency revenue growth and scaled the generative AI book of business to approximately $1 billion, reinforcing IBM’s hybrid cloud and AI strategy execution . IBM’s 2024 performance under the executive team featured $62.8B revenue, $13.4B cash from operations, $12.7B free cash flow, 57% gross margin, 18% operating PTI margin, and ~76% of revenue from Software and Consulting; total shareholder return was ~40% in 2024, outpacing the S&P 500’s ~25% . IBM’s annual pay practices received 92.2% Say-on-Pay support in 2024, reflecting shareholder alignment with the Company’s pay-for-performance design .
Past Roles
IBM’s 2025 Proxy does not include a detailed prior-role biography for Mr. Thomas; no executive appointment/departure 8‑K (Item 5.02) filings were found for 2023–2025 ; ListDocuments returned none for 8-K 5.02 (2023–2025) [functions.ListDocuments: 8-K 5.02].
External Roles
No external public-company board roles or committee positions for Mr. Thomas are disclosed in the 2025 Proxy; press releases cite him in IBM partner announcements in his IBM capacity (SVP, Software & CCO) .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $994,750 | $1,048,000 |
| Target Bonus % of Salary | 135% (NEO policy) | 135% (NEO policy) |
| Actual Annual Incentive Paid ($) | $1,552,500 | $1,866,800 |
2025 target cash compensation and LTI mix (granted Feb 18, 2025):
| Component | Amount ($) | Notes |
|---|---|---|
| 2025 Salary Rate | $1,170,000 | Effective Apr 1, 2025 |
| 2025 Annual Incentive Target | $1,580,000 | Mix set by Committee |
| 2025 PSUs (target value) | $6,750,000 | 60% of LTI mix |
| 2025 RSUs (value) | $2,250,000 | 20% of LTI mix |
| 2025 Stock Options (value) | $2,250,000 | 20% of LTI mix; options valued at factor 0.25 |
All NEOs (ex-CEO) have 75% of annual target pay at risk; SVPs have 7x salary stock ownership requirement vs peer median 4x .
Performance Compensation
Annual Incentive Program (AIP) – 2024
| Item | Detail |
|---|---|
| Metrics | Revenue; Operating Cash Flow (non-GAAP) |
| Leveraged Score | Revenue 97%; Operating Cash Flow 104% |
| Pool Funding Score | 110% (modifier had no impact; Committee added +10 qualitative points reflecting execution in hybrid cloud/AI, innovation, and TSR) |
| Individual Target | NEOs at 135% of salary; Mr. Thomas payout $1,866,800 |
| Modifier Design | Talent and inclusion goals (no impact in 2024); future modifier includes Talent and Innovation |
Long-Term Incentive – PSU Program (2022–2024 performance period)
| Metric (Weight) | Threshold Attain/Payout | Target Attain/Payout | Max Attain/Payout |
|---|---|---|---|
| Revenue (40%) | 70% / 25% | 100% / 100% | 120% / 150% |
| Operating EPS (30%) | 70% / 25% (non-GAAP) | 100% / 100% | 120% / 150% |
| Free Cash Flow (30%) | 70% / 25% (non-GAAP) | 100% / 100% | 120% / 150% |
| ROIC Modifier | Compared vs S&P 500 IT and S&P 500 (ex-FS); 0 for 2022–2024 | ||
| Final Leveraged Payout | 93 for 2022–2024 | ||
| Payout Timing | Paid Feb 2025 (vesting at 12/31/2024 at IBM close $219.83) |
2024 Equity Grants (awarded Jan 29/Feb 21, 2024)
| Award Type | Units/Values | Vesting/Terms |
|---|---|---|
| AIP (Target/Max) | $1,436,000 / $4,308,000 | FY performance |
| PSUs (Thr/Target/Max) | 7,999 / 31,997 / 54,395 units | 3-year performance; payout Feb following period |
| RSUs | 10,666 units | 25% per year over 4 years |
| Stock Options | 53,328 options; exercise price $180.87 | 25% per year over 4 years; 10-year term |
2024 vesting realized: 64,263 shares vested for Mr. Thomas in 2024, with $12,789,321 value at vest (includes PSUs/RSUs/RRSUs) .
Equity Ownership & Alignment
| Ownership Detail (as of Dec 31, 2024) | Amount |
|---|---|
| Common Stock | 63,007 (includes 18,040 with shared voting/investment power) |
| Stock-based Holdings (incl. RSUs/Excess Savings stock equivalents) | 106,442 |
| Acquirable within 60 days (options/RSUs vesting) | 73,542 |
| Value of Common + DCEAP at FY-end | $13,850,889 (at $219.83/share) |
| Shares Pledged | None; IBM prohibits hedging/pledging by executives |
| Ownership vs Outstanding | No individual’s beneficial holdings >1/20 of 1% of shares |
| 2024 Nonqualified Deferred Compensation | Exec contributions $67,535; IBM match $68,366; aggregate balance $1,586,417 |
| Pension (Qualified+RBA, annual benefit at normal retirement age) | $17,558; present value $99,986 |
| Stock Ownership Guidelines | SVPs must hold ≥7x salary; counts direct holdings, IBM Stock Fund, deferred IBM shares; excludes unvested awards and unexercised options |
Guiding policies: no hedging/pledging, robust clawbacks on restatements and detrimental conduct, noncompetition and nonsolicitation agreements (~12 months), and no individual severance or change-in-control agreements or excise tax gross-ups .
Employment Terms
| Category | Key Terms |
|---|---|
| Non-compete / Non-solicit | Executives agree to noncompetition and nonsolicitation for 12 months post-employment |
| Clawbacks | Restatement-based clawback of incentive pay; equity clawbacks for detrimental conduct; clawback of certain Excess Savings contributions |
| Severance/CoC | IBM has no individual severance or change-in-control agreements; no excise tax gross-ups; no accelerated vesting for executive officers |
| Potential Payments Upon Termination (illustrative amounts at 12/31/2024) | AIP $1,866,800; Stock Options $5,129,684; Stock Awards $6,449,153; Excess Savings (Basic Account) $1,586,417 |
| Deferred Compensation Election | Mr. Thomas elected nonqualified plan benefit as lump sum upon separation |
Investment Implications
- Pay-for-performance alignment: AIP and PSUs hinge on revenue, operating cash flow/EPS, free cash flow, with a rigorous PSU framework and ROIC modifier; 2022–2024 PSU paid at 93, while 2024 AIP pool was 110% with +10 qualitative points driven by measurable execution and TSR, signaling strong operating leverage in software-led strategy .
- Retention risk looks well managed: 2025 target pay mix keeps 75% at risk; robust ownership guidelines (7x salary for SVPs), 12-month noncompete/nonsolicit, and broad clawbacks reduce flight-risk and misalignment; no hedging/pledging policy further reinforces investor alignment .
- Insider supply considerations: Large scheduled RSU and option vesting (e.g., 64,263 shares vested for Thomas in 2024; multi-year RSU/option grants vest 25% annually) can create periodic supply; however, IBM prohibits hedging/pledging and does not accelerate executive vesting, which moderates adverse signaling risk .
- Shareholder governance support: With 92.2% Say-on-Pay approval, IBM’s compensation oversight by an independent committee and explicit “no CoC agreements / no excise tax gross-ups” posture reduce pay-related governance overhang and potential negative catalysts from shareholder backlash .
Overall, Mr. Thomas’ incentive structure is tightly coupled to IBM’s software-led growth and cash generation, with safeguards (ownership, clawbacks, noncompete) that lower retention and governance risks while maintaining performance leverage in AI/hybrid cloud.