EMC Vs. Dell Top Executive Compensation: How Do They Compare?

It Pays To Be Boss

Dell and EMC executives talk a lot about how well the two companies will fit together once their proposed merger is finalized, but there is one area where things don't really line up: executive pay.

EMC's top executives make vastly more than privately held Dell's. Being publicly traded makes a big difference -- EMC execs get millions in stock awards as part of their pay. The company detailed the 2015 pay packages of top executives recently in its annual proxy filing with the U.S. Securities and Exchange Commission.

The pay discrepancies come with EMC weighing in at less than half the annual revenue weight class of Dell. In its latest fiscal year, Dell's revenue was about $55 billion and EMC's was about $25 billion. However, EMC reported net income of $2.1 billion, while Dell reported a $1.1 billion loss.

CEO Joe Tucci's $1 million base salary is relatively close to the $950,000 CEO Michael Dell made last year, and while the salaries of other top Dell execs are perhaps in the ballpark with EMC's, total pay for EMC brass is consistently more.

Dell, which disclosed executive pay in a separate SEC filing connected to the proposed merger, wouldn't comment on how the company intends to square the pay packages of EMC executives with their new lives inside a privately held firm. Dell expects the acquisition, valued around $60 billion, to close between May and October.

2015 Pay Package: Joe Tucci

Tucci's pay totaled $10.4 million last year, a drop of more than 7 percent compared with the year before, thanks to the declining value of stock awards issued to him. The chairman, president and CEO's $1 million salary hasn't changed in recent years, and his bonus, $1.1 million last year, has fluctuated. Stock awards, however, have steadily declined, from $9.4 million in 2013 to $7.9 million last year. Tucci's 2015 package also included $320,964 in "other compensation," including $218,274 in air travel, as well as tax planning service, 401(k) contributions and other benefits. Tucci has been CEO of EMC since 2001, and chairman since 2006. He's staying in that capacity only until the merger with Dell closes. Under EMC's change-in-control policy, Tucci stands to collect about $39 million in cash and stock after the merger closes.

Tucci's Salary-Bonus Is More Than Four Times Michael Dell's Pay Package

If not for an $8.9 million cash payout tied to Dell's $24.9 billion leveraged buyout in 2013, then EMC CEO Joe Tucci earned more than four times what Dell founder, Chairman and CEO Michael Dell (pictured) did for Dell's fiscal year ended Jan. 29, 2016. Dell, in fact, was not the highest paid Dell executive in fiscal 2016. Dell's pay package totaled about $2.4 million for the year. That includes a salary of $950,000, a $1.4 million bonus and just under $18,000 in benefits and perks, including a 401(k) plan, health insurance, life insurance and other items.

2015 Pay Package: David Goulden

Goulden, CEO of EMC Information Infrastructure, the company's largest division, saw his 2015 pay package decline 6.4 percent from the previous year. While his $850,000 salary hasn't changed, his bonus declined 11.2 percent year over year, to $954,415, and he got $7.9 million in stock awards compared with $8.4 million the previous year. Goulden's pay included $103,051 in "other compensation," including just over $9,000 in air travel, as well as other benefits. Goulden has been with EMC for more than a decade, and took the helm at EMC II in 2014. Goulden joined EMC from Getronics, and was also previously an exec at Wang and Unisys.

When the Dell EMC merger is finalized, Goulden stands to receive payments totaling about $31.1 million, including $7.1 million in cash severance and $23.9 million in accelerated equity awards, if he leaves the combined company within two years, according to EMC's change-in-control policy.

Haas' Salary In Ballpark With Goulden's

Dell President and Chief Commercial Officer for Enterprise Solutions Marius Haas (pictured) has been with Dell since 2012, and like Goulden, he'll report directly to CEO Michael Dell after the merger closes. He received a 2016 pay package totaling nearly $3.4 million, including a base salary of $772,890, a $2.6 million bonus, and $1,206 in perks and benefits. In addition, Haas' cash payout tied to Dell's going private transaction was $439,467. As Dell's president and chief commercial officer for enterprise solutions, Haas spearheads global go-to-market efforts for the company's commercial portfolio. Haas' career has included stints at Hewlett-Packard, Compaq and Intel, as well as storied private equity powerhouse Kohlberg Kravis Roberts & Co.

2015 Pay Package: EMC CFO Zane Rowe

Rowe's pay package for 2015 was $6.5 million on a combination of $750,000 in salary, nearly $5 million in stock awards, a $600,741 bonus and $195,373 in "other compensation," including a $180,450 housing allowance that was part of his 2014 new hire package, as well as tax and financial planning services and 401(k) contributions. In January of this year, Rowe was tapped to replace Jonathan Chadwick as CFO of VMware.

When the Dell-EMC merger is finalized, Rowe stands to receive about $6.1 million in payouts, nearly equally split between $3 million in cash severance and $3.1 million in accelerated equity awards, if he leaves the combined company within two years, under the company's change-in-control policy.

Rowe Made Almost Twice As Much As Dell's CFO

Thomas Sweet (pictured), Dell senior vice president and CFO, has been with Dell for nearly 20 years. His pay package for the 2016 fiscal year was $3.4 million, including a base salary of $650,000, a $2.7 million bonus that included a $170,000 cash award as part of a 2013 retention agreement, and about $35,000 in benefits and perks. Sweet also got a cash payout of $169,364 in connection with Dell's leveraged buyout. Sweet has a broad set of responsibilities, including financial planning and analysis, the company's tax accounting, treasury and investor relations. He's also responsible for Dell corporate strategy and development.

2015 Pay Package: Jeremy Burton

Burton, EMC's president of products marketing, was one of two EMC execs who saw their total pay increase in 2015. Burton's $8.5 million pay package was a 23 percent increase compared with the year before. His $800,000 salary was up 4.2 percent from the prior year, while his stock awards of $6.9 million were 32 percent more than his 2014 awards. Burton's bonus, however, shrunk to $665,940 from $717,035. Burton will be chief marketing officer of the combined Dell-EMC. Burton was president and CEO of Serena Software before joining EMC. He's also held executive positions at Symantec, Veritas and Oracle.

When the Dell-EMC merger is finalized, Burton stands to receive about $23.5 million, including $5.6 million in cash severance and $17.9 million in accelerated equity awards, if he leaves the combined company within two years, according to the company's change-in-control policy.

Jeff Clarke's Salary Is In EMC Territory

Clarke, who has been with Dell since 1987, received a 2016 pay package totaling $3.8 million, including an $826,160 base salary, a bonus just shy of $3 million, and $25,146 in benefits and perks. As part of Dell's going-private transaction, Clarke got a cash payout of $684,626 last year. As vice chairman of operations and president of client solutions, Clarke is responsible for Dell's global manufacturing, procurement and supply chain activities, as well as the engineering, design and development of desktops, notebooks and workstations for consumers, SMBs and enterprise. Clarke also leads customer support, as well as global IT planning and governance.

2015 Pay Package: Howard Elias

Elias, EMC's president and COO of global enterprise services, also saw his pay package increase significantly last year. His package totaled $8.5 million, a 22.5 percent increase over the previous year, and it included a 4.1 increase to his base salary, to $781,923. Like Burton's, Elias' bonus dipped in 2015, but his stock awards were just under $7 million, about 32 percent more than they were a year before. Elias, who along with Dell's Rory Read is heading the integration of the two companies, has been with EMC since 2003. He joined the company from HP, and he also previously held executive positions at Compaq.

When the Dell EMC merger is finalized, Elias stands to receive about $23.9 million, including $5.4 million in cash severance and $18.4 million in accelerated equity awards, if he leaves the combined company within two years, according to EMC's change-in-control policy.

Dell's Rory Read Had A Good Year, But His Salary Is Far Below Elias'

Rory Read, who was hired about a year ago as chief operating officer and is now heading up the integration of Dell and EMC along with EMC COO Howard Elias, received the biggest pay package of any Dell executive in fiscal 2016. His total compensation for 2016 was $10.5 million, including a $750,000 signing bonus, as well as option awards that carried a value of $7.1 million when they were granted to him. His base salary is $496,154. Read's contract also stipulates that if he does not receive a payment of at least $2 million under the company's special incentive bonus plan in fiscal 2016, 2017 and 2018, he may resign and get half that amount. Not counting the $750,000 signing bonus, Read's bonus for 2016 was about $2.2 million.

Lots Of Options

Publicly traded companies award stock and stock options as a way to retain employees. Stock awards vest over time and options are set to be exercisable over time, each on a predetermined schedule. The employee can exercise his or her option to buy company stock at the so-called strike price that was set at the time the stock was awarded, the idea being that the strike price will be a discount to the stock's market value at the time of the exercise. Other stock awards simply vest on a predetermined schedule. In 2015, Tucci realized $8.8 million in value on the exercise of previously awarded options and $10.1 million on the vesting of previously issued stock awards. Goulden realized $912,450 in value on the exercise of previously granted options and $6 million on the vesting of previously awarded stock. Rowe also realized $1.8 million on the vesting of previously awarded stock. Burton realized just under $4 million in the vesting of previously awarded stock. Elias realized about $4.8 million in the value of previously awarded stock that vested during the year.