Dell Inc. disclosed Tuesday its board approved a $91.1 million
special bonus pool as retention bonuses for some of its executives,
as the computer maker tries to hold onto key personnel while it
pursues a $24.4 billion buyout deal.
In a securities filing, Dell said it approved the payouts to
"aid in the retention of certain key employees...who are critical
to the company's future success." Eligible Dell employees include
its senior executives other than Michael Dell, the company's
founder and chief executive. Mr. Dell is participating in a deal
struck in February to buy out Dell's public stockholders at $13.65
apiece.
The retention plan entitles participating employees to cash
awards up to 100% of their base salaries, according to the filing
Tuesday with the Securities and Exchange Commission. Dell Chief
Financial Officer Brian Gladden is eligible for a maximum retention
payment of $775,000, according to the filing. Steve Felice, chief
commercial officer, is eligible for a payment up to $800,000.
The awards are tied to the company meeting targets for operating
free cash flow for Dell's current fiscal year ending Jan. 31. The
bonuses will be paid in March 2014, the filing said.
The filing said participating employees also will be eligible to
have their Dell equity paid out to them if the employees are fired
without cause within two years after the company changes hands.
Separately, in a letter to Dell employees also filed with the
SEC Tuesday, Mr. Dell defended the rationale for the buyout, saying
he is "confident we are headed toward a fantastic outcome for Dell,
our customers and our team." Mr. Dell said in the message that
taking the company private "will allow us to continue our
transformation but do it much faster."
Mr. Dell said he met last week with employees in several Dell
offices, including at the company's Round Rock, Texas, headquarters
and Nashville, Tenn. An employee described one of the conversation
as a "pep talk," followed by a question-and-answer session. In his
letter, Mr. Dell said he hopes all employees "get a chance to hear
from me personally about our strategy, our plans to go private, and
other topics."
He also said Dell remains committed to investing in the PC
business, despite recent research reports that showed big drops in
sales in the first quarter.
"Overwhelmingly, PCs are still how business gets done around the
world," Mr. Dell said. "We are fine tuning and investing in our
business to innovate and compete more aggressively where growth is
happening."
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