Dell exec receives multi-million dollar retention bonus

It has emerged that Ronald G. Garriques (President for Dell’s Consumer products division) is poised to receive a $2 million cash bonus.

 

Garriques will have to pay back this retention bonus in full if he leaves the computing giants before March 31st 2010. This payment is equivalent to one year’s salary and a target bonus.

 

The former Motorola executive is not contractually entitled to this bonus, and this lump sum will replace a severance deal he had previously negotiated.

 

The severance deal (negotiated when Garriques joined Dell in February 2007) entitled him to $12 million compensation if his contract had been terminated within the first three years of employment. The deal also stipulated that for each year of his employment, Garriques would receive a grant of restricted stock equal to six times his yearly salary.

 

Since this deal has been terminated he will not receive either forms of compensation (he will not receive the stock grant for the calendar years 2010, 2011 and 2012) nor will he receive the last of three annual $1 million payments.

 

The Grapevineonline spoke to Amy King, a spokesperson for Dell, to ask why Garriques had accepted a cash bonus to replace such a lucrative severance deal that had already been agreed. King explained that Garriques’ contract is considered a personnel matter, so Dell are only available to divulge specific information.