Want to know how much money Dell Technologies executives made last year?
You’ve come to the right place.
We’ve analyzed an annual filing from Dell Technologies with the U.S. Securities and Exchange Commission, which discloses how much money their top executives were paid last fiscal year. The company’s fiscal year ended on February 3, 2017.
First, let’s start with the basics, the annual salaries of five senior executives at Dell Technologies:
|Name||Title||Base Salary As of February 2017||Actual Salary Paid by Dell Technologies in Fiscal Year 2017|
|Michael Dell||Chairman and CEO||$950,000||$950,000|
|Thomas Sweet||Chief Financial Officer||$725,000||$686,539|
|Jeremy Burton||Chief Marketing Officer of Dell||$800,000||$338,462|
|Howard Elias||President of Dell EMC Services and IT||$800,000||$338,462|
|David Goulden||President of Dell EMC||$850,000||$359,615|
The Dell Technologies leadership team actually consists of 15 people, but the SEC rules require companies that have publicly traded stock to only list their top five highest-paid employees.
There are different amounts for base salary because of Dell’s merger with EMC Corp. Three executives, Jeremy Burton, Howard Elias and David Goulden, were technically only hired by Dell Technologies in September.
The second salary column refers only to the salary paid to the executives by Dell in fiscal year 2017.
(A bit of business terminology housekeeping: When Dell Inc. bought data storage company EMC Corp. the company changed its name to Dell Technologies. The PC part of the business is still called Dell and the company’s storage and server business is called Dell EMC. Throughout this story you will see just the name “Dell” used, and that’s meant to refer to the entire company, not just the PC division.)
Another piece of the compensation pie are bonuses, which are typically tied to how well the company performed. Here are the bonuses for each executive in fiscal year 2017:
|Michael Dell||Chairman and CEO||$2,375,000|
|Thomas Sweet||Chief Financial Officer||$3,200,641|
|Jeremy Burton||Chief Marketing Officer||$379,167|
|Howard Elias||President of Dell EMC Services and IT||$379,167|
|David Goulden||President of Dell EMC||$545,052|
What’s noteworthy is that Sweet earned a bigger bonus than Michael Dell, the company’s founder. He got a special bonus of $2 million last fiscal year, which Dell says is because of his role in the EMC acquisition.
The bonuses for the EMC executives were smaller mostly because they were operating under a different bonus pay structure through EMC, not Dell Technologies.
If we’re strictly looking at base pay and bonuses earned in fiscal 2017, Sweet earned the most in fiscal year 2017 with take-home pay of $3,887,180.
If you want to know how that compares to last year, click here. Michael Dell essentially received a 40 percent raise, while Sweet’s compensation bump was closer to 16 percent.
But that’s not the end when it came to bonuses.
The three executives who joined the Dell Technologies leadership team from EMC all received signing bonuses last year. Burton and Elias received bonuses of $5 million, to be paid over a three-year period starting in February 2017. Goulden received an $8 million signing bonuses.
While this compensation was awarded in fiscal 2017, it won’t actually be pocketed until this year.
Now we get to the complicated part: stock awards.
Especially for publicly traded companies, the majority of an executive’s pay package these days comes in stock awards, usually an option to buy a stock at a certain price or an unvested stock unit, which is essentially a promise to receive stock at a later date.
Dell has a publicly traded “tracking stock” that uses the ticker symbol DVMT. It’s the main reason the public is able to access all this financial data on Dell Technologies, even though the company is privately run.
The tracking stock was created to track the company’s economic interest in VMware, one of its subsidiaries.
But here’s where it gets especially tricky: The equity-based financial awards that Dell’s senior executives receive is made up of stock that is NOT publicly traded, called Class A or Class C shares.
The value of these shares is determined by a third party -- a firm called Houlihan Lokey that specializes in valuing companies.
So how do you figure out a share’s value when the company isn’t publicly traded?
Glad you asked.
A compensation expert with the firm Sembler Brossy named Todd Sirras told me that the value of a private company is typically determined by examining financial statements, studying other similar publicly traded companies and looking at transactions.
Unlike publicly traded stocks, the value is set for long periods of time, such as a year, rather than the frequent gyrations of publicly-traded stock.
But in Dell’s case, it is possible to glean some information about what these shares are worth through SEC filings when an executive either acquires or sells stock.
In early May, Class C stock was valued at around $30 a share.
For fiscal year 2017, there were only three executives that received any additional equity in the company. That’s because these awards were tied to the EMC transaction, and given to the former EMC executives.
|Name||Title||Stock Awards||Options Awards|
|Michael Dell||Chairman and CEO||0||0|
|Thomas Sweet||Chief Financial Officer||0||0|
|Jeremy Burton||Chief Marketing Officer||$10,706,191||$1,793,251|
|Howard Elias||President of Dell EMC Services and IT||$10,706,191||$1,653,424|
|David Goulden||President of Dell EMC||$21,412,367||$2,490,348|
That chart captures the value of stock awards received in 2017, which Dell describes in a footnote as a mixture of cash, options and grants of shares. Their value is based on the grant date.
If you take together each executive’s salary, bonus, and stock awards, plus a category called “other compensation” that includes benefits like spousal travel, Dell EMC President David Goulden earned the most in 2017, with estimated total compensation of $24.9 million, according to the filing.
But what about all the stock options and other unvested stock that executives might be sitting on?
Here’s what that looks like:
|Name||Title||Stock Options that are Exercisable||Stock Options That are Unexercisable||Number of units of stock that have not vested||Market value of unvesetd units||Equity incentive plan awards (unearned shares)||Value of uneared equity incentive plan awards|
|Michael Dell||Chairman and CEO||6,545,454||4,363,637||0||N/A||0||N/A|
|Thomas Sweet||Chief Financial Officer||424,362||1,697,456||0||N/A||0||N/A|
|Jeremy Burton||Chief Marketing Officer||148,987||27,918||218,182||$6,292,269||327,273||$9,438,553|
|Howard Elias||President of Dell EMC Services and IT||125,629||37,482||218,182||$6,292,369||327,273||$9,438,553|
|David Goulden||President of Dell EMC||201,006||44,668||436,364||$12,584,738||654,545||$18,877,078|
Bottom line: Sweet and Michael Dell still have a lot of stock options, some of which can be exercised immediately.
Then there’s the amount of stock that each executive actually outright owns:
|Name||Title||Class A||Class C||Percentage Ownership of All Outstanding Dell Technologies Stock|
|Michael Dell||Chairman and CEO||346,470,444||44%|
|Thomas Sweet||Chief Financial Officer||14,653||654,543||< 1 %|
|Jeremy Burton||Chief Marketing Officer||722,360||<1%|
|Howard Elias||President of Dell EMC Services and IT||671,084||<1%|
|David Goulden||President of Dell EMC||1,409,310||<1%|
(Michael Dell’s ownership stake of Class A shares is actually 83 percent and he owns a majority stake of the company.)
Dell Technologies executives - and their spouses or domestic partners - also get some interesting benefits, according to the filing.
They get a “comprehensive annual physical” for themselves and their spouse or domestic partner. This also includes the reimbursement of travel and lodging costs related to the physical, up to $5,000 per person.
Top executives also get security services, including alarm installation and monitoring, and in some cases, home security upgrades. The filing notes, however, that Michael Dell reimburses the company for costs related to his family’s personal protection.
Dell is entitled to receive reimbursement for the cost of financial counseling services up to $12,500 annually.
And spouses of Dell executives can travel to company events on the company dime, so long as the “spousal travel is at the request of Dell Technologies.” Last fiscal year, spousal travel expenses were $22,732, according to the filing.
What does it all mean?
In the grand scheme of executive pay, Dell Technologies isn’t anywhere near the top of the list. Tim Cook, Apple’s CEO, clocked an annual pay of $150 million last year.
But I’ll warn that how compensation is calculated can vary. Some lists include the value of stock awards when they are first granted, versus when an executive actually receives them.
Nerd Wallet’s list puts Cook’s annual compensation at over $377 million. Michael Dell’s annual pay puts him more on par with Southwest Airlines CEO Gary Kelly, according to Nerd Wallet’s ranking.
This story was updated on May 22 to include a revised version of the chart showing how many unvested or unexercised stock units and options each executive has.
This story was updated on May 24 in order to delete inaccurate information related to the value of Class A shares. The value of these shares is unknown. The American-Statesman regrets the error.
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