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Dell CEO's Pay Falls 45% on Cut in Options

The company also says it aims to drop 'Computer' from its name to showcase its broader range of products.

May 06, 2003|From Times Wire Services

Dell Computer Corp. Chief Executive Michael Dell's compensation fell by 45% in the last fiscal year because the world's second-largest personal-computer maker reduced his option awards, the company disclosed Monday.

In a preliminary proxy statement, Dell also said it would ask its shareholders at their annual meeting in July to drop "Computer" from its name because the company has expanded into products including data storage systems, printers and services.

The computer maker said Monday that its name doesn't fit anymore because it also is a leading seller of servers, storage systems and other high-technology goods and services.

A company spokesman, T.R. Reid, said the name change would discourage anyone from associating Dell strictly with desktop computers.

"If you look at our advertising, our buildings, what you see is Dell," Reid said. "With the legal constraints, Dell Inc. is about as close as you can get to just plain Dell."

Dennis Riney, executive vice president of FutureBrand, a brand-consulting firm, said the name change carried few risks.

"The company is trying to portray itself as going beyond just computers," Riney said. "And since they've built such a strong brand name, the word 'computer' is almost superfluous anyway."

As for Michael Dell's compensation, for the year ended in January, it declined to $8.76 million from $15.9 million a year earlier, according to the proxy. The value of his option awards fell by 64% to $5.32 million.

The company's shares fell 11% last fiscal year after rising 6.4% a year earlier. Sales increased 14% to $35.4 billion, and net income almost doubled to $2.12 billion, or 80 cents a share.

Dell and other officials' options pay fell because the marketplace isn't as competitive in luring away executives as it has been, Reid said.

Dell's bonus rose sevenfold to $2.48 million in fiscal 2003 from $347,236 in fiscal 2002. His salary increased by 2.6% to $950,000. Dell, who founded the company in 1984, remains the largest shareholder, with 327.6 million shares, or 13% of the company.

President and Chief Operating Officer Kevin Rollins' total compensation fell 86% to $7.85 million. Shares of the Round Rock, Texas company fell 7 cents to $29.50 on Nasdaq.

Bloomberg News was used in compiling this report.

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