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Dell CEO's Pay Plunges 85%

Computers: Salary, options and bonus drop to $16.6 million from $109 million as sales growth slows.


ROUND ROCK, Texas — Dell Computer Corp. founder and Chief Executive Michael Dell's pay tumbled 85% to $16.6 million as the No. 1 direct seller of personal computers wrestled with its worst performance in six years.

Michael Dell's total compensation for the fiscal year ended Jan. 28 fell from almost $109 million a year earlier, the company said. The bulk of the decline came from fewer stock options. Dell, 35, who ranked fifth on Forbes magazine's list of wealthiest Americans for 1999, received options valued at about $14 million last year, down from more than $105 million the previous year.

Dell's salary rose less than 1% to $850,000 from $844,231. His annual bonus, which is tied to the company's performance, fell to $1.67 million from $2.62 million.

Dell Computer's shares tumbled 21% during its last fiscal year, the worst performance since the year ended in January 1994, when the shares slid 54%. The Round Rock, Texas-based company's stock has fallen 14% this year. The shares rose $1.63 to close at $44 on Nasdaq on Tuesday.

"We fell short of our own goals," Dell spokesman T.R. Reid said.

Last year's options award was higher because it was the final installment in a multiyear grant that Michael Dell received from the company's board beginning in 1996, Reid said. Before that year, he didn't receive any options.

This year's options grant "is the product of the more standard criteria" that the company's board uses in awarding options, Reid said.

Dell's pay was outlined in a proxy statement filed with the Securities and Exchange Commission.

Last year, Dell's wealth ranked him behind Microsoft Corp. Chairman Bill Gates, Microsoft co-founder Paul Allen, Berkshire Hathaway Inc. Chairman Warren Buffett and Microsoft President Steve Ballmer, according to Forbes.

Dell's 12.4% stake in the company he founded in his college dorm room in 1984 is worth $13.62 billion. His wife and two family trusts control an additional 46.4 million shares, worth $1.96 billion.

The decline in Dell Computer's shares came as sales growth slowed. Executives warned investors that sales probably will rise about 30% each quarter this year from the year-earlier quarters. From 1996 to 1998, when Dell was the best-performing stock in the Standard & Poor's 500 Index, sales rose 50% or more every quarter.

Analysts blame the slower sales growth on the company's size, with annual sales topping $25 billion last year. In addition, the company has wrestled during the last year with parts shortages, slower demand for corporate PCs and an end-of-the-year slowdown because of customers' concerns about the transition to year 2000.

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