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Lou Gerstner wrote, "People truly do what you inspect, not what you expect." … Lest we forget, these "inspection pages" exist because chief executives are "people" too.

Peter E. Greulich

Arvind Krishna's Overall Performance Through 2023

Date Published: April 11, 2022
​Date Modified: April 16, 2024
A high-quality color slide with the tagline: Arvind Krishna Overall Performance - Key Performance Measurements 2020-2023.
Arvind Krishna's performance in his first one-hundred days is here. Arvind Krishna's first-year's performance is here. As of April 16, 2024, this page and all its associated webpages have been updated with key performance information/metrics (KPIs) through the end of 2023. These webpages cover the overall performance of IBM's tenth Chief Executive Officer, Arvind Krishna, and are updated once each year after the publication of IBM's Annual Report.
Arvind Krishna’s Overall Performance Numbers: 2020-23
  • Summary of Arvind Krishna's Overall Performance in Critical Areas
    • ​Revenue Performance
    • Profit Performance
    • Market Value Performance
    • Shareholder Returns and Risk Performance
    • Employment Performance
  • Links to Arvind Krishna's Overall Key Performance Indicators (KPIs)​
Summary of Arvind Krishna's Overall Performance as IBM's CEO
In April 2020, IBM installed its tenth chief executive officer: Arvind Krishna.
​How has Arvind Krishna performed since taking over the corner office? ​After four years, Arvind Krishna's performance numbers at the end of 2023 were as follows:

At the end of Arvind Krishna’s fourth year as chief executive officer (2020–2023) his performance continues as it started which can be described with one word: unremarkable. Revenue fell -19.8% to $61.9 billion and profits fell -20.5% to $7.5 billion; yearly revenue growth has been less than inflation in all four years and inflation exceeded profit growth in three out of four years; both employee sales and profit productivity were flat—profit and sales productivities in 2023 were fundamentally equivalent to what they were in 2019, and inflation makes this picture even worse;
shareholder returns have increased but run significantly behind key benchmark indices and shareholder risk remains unaddressed by IBM’s corner office; IBM's market value in the short-term is a bright spot but if it will remain so in the long term is very much a wait-and-see game; and finally, worldwide employment continues to plummet, and with most of the highly-productive, high-wage workers now almost gone it is doubtful IBM can continue to pad its profit line with layoffs as worldwide workload rebalancing has lost, for the most part, its “worldwide” context.

​Here are the details.
A high-quality, color image of the front cover of IBM's 2023 Annual Report.
This information is from IBM's Annual Reports.

Arvind Krishna Revenue Performance Metrics
-     Revenue Performance
-     Revenue Growth Performance
​-     Employee Sales Productivity Performance
-     IBM's 2023 Revenue Performance
IBM’s 2023 Revenue under Arvind Krishna’s four years of leadership is down $15.3 billion since the end of 2019, falling ​$3.5 billion in 2020, falling $16.3 billion in 2021, rising $3.1 billion in 2022, and finally, rising $1.3 billion in 2023 to reach $61.9 billion—a 20% decline in revenue from the $77-billion corporation Arvind Krishna inherited from Virginia (Ginni) M. Rometty in 2020.

Taking the Kyndryl divestiture into consideration, IBM’s 2023 Revenue under Arvind Krishna’s leadership is up $4.1 billion since the end of 2019, falling ​$2.5 billion in 2020, rising $2.2 billion in 2021, rising $3.2 billion in 2022, and finally rising $1.3 billion in 2023 to achieve $61.9 billion—a 7% revenue increase from the $57.7‑billion corporation Arvind Krishna inherited from Virginia (Ginni) M. Rometty in 2020 (using Kyndryl adjusted revenue numbers from IBM’s Annual Reports).

An important contextual footnote: Inflation became a serious performance consideration over this timeframe as it increased: 1.2% in 2020, 4.7% in 2021, 8.0% in 2022, and finally 4.1% in 2023—in total, inflation increased 19.2% over this four-year period. Even allowing for the Kyndryl divestiture, IBM’s revenue increases did not keep up with inflation: ‑4.4% in 2020 vs. inflation of +1.2%, 3.9% in 2021 vs. inflation of +4.7%, 5.5% in 2022 vs. inflation of 8.0%, and finally 2.2% in 2023 vs. inflation of 4.1%--in total, IBM revenue only increased 7.2% vs. inflation of 19.2% over this same four-year period.

[Link to Revenue Charts]

-     IBM's 2023 Revenue Growth Performance
IBM’s 2023 Revenue Growth under Arvind Krishna’s leadership was up 2.2% in 2023. In the previous three years, IBM’s revenue growth was down -4.6% in 2020 (down -4.4% considering the Kyndryl divestiture); down 22.1% in 2021 (up 3.9% considering the Kyndryl divestiture); and up 5.5% in 2022.

Unfortunately, inflation has been higher than the corporation’s revenue growth in all four years of Arvind Krishna’s leadership of IBM. Using the Kyndryl divestiture revenue growth percentages as the best case scenario, IBM’s 2023 Revenue Growth rates were as follows: IBM’s 2020 revenue growth was down 4.4% but inflation was up 1.2%; IBM’s 2021 revenue growth was up 3.9% but inflation was up 4.7%; IBM’s 2022 revenue growth was up 5.5% but inflation was up 8.0%; and finally, IBM’s 2023 revenue growth was up 2.2% but inflation was up 4.1%.
​
[Link to Revenue Growth Charts]

-     IBM's 2023 Employee Sales Productivity
IBM’s 2023 Employee Sales Productivity under Arvind Krishna’s four years of leadership was up .8% (+.008)—since the end of 2019. Essentially, an IBM employee in 2023 was as productive as an employee in 2019 producing revenue of $202,620 vs. $201,000, respectively. Unfortunately, while sales productivity was essentially flat at .8% (+.008), inflation over this same period was up almost 19.2%. ​To keep up with inflation IBM needed every 2023 employee to produce $240,000 in revenue instead of $202,620.
 
[Link to Employee Sales Productivity Charts]
Arvind Krishna Profit Performance Metrics
-     Profit Performance
-     Profit Growth Performance
-     Employee Profit Productivity Performance
-     IBM's 2023 Profit Performance
IBM’s 2023 Profit under Arvind Krishna’s four years of leadership is down $1.93 billion since the end of 2019: falling $3.8 billion in 2020, increasing $.15 billion in 2021, increasing $.38 billion in 2022, and finally, increasing by $1.4 billion in 2023.

If IBM’s net income or profits had kept up with inflation over this four-year period, IBM’s net income would have increased from $9.4 billion in 2019 to $11.2 billion—instead of its $7.5 billion, in 2022.

An important contextual footnote: Net Income or profit and its effect on employee profit productivity are both quite sensitive to large one-time transactions. In this case, in the third quarter of 2022 IBM took a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion ($4.4 billion net of tax), primarily related to the accelerated recognition of accumulated actuarial losses of the United States Qualified PPP. So, to keep this information more reflective of the corporation’s actual production of profit, this author added $4,480 million to adjust for post-tax pension settlement charge to $1,639 million from IBM’s 2023 Annual Statement. [$5,970 - $1,490 = $4,480]. This aligns with the author’s goal to provide more insightful information into (1) IBM’s production of profits and (2) its employees’ productivity in producing those profits.
 
[Link to Profit Charts]

-     IBM's 2023 Profit Growth Performance
IBM’s 2023 Profit Growth under Arvind Krishna’s leadership was up 22.6% in 2023. In the three previous years, IBM’s profit growth was down -40.7% in 2020, up 2.7% in 2021, and up 6.6% in 2022. Over these four years, IBM’s profits were down 20% while inflation was up almost 20%—19.2%.

Three years of back-to-back positive profit growth (2021–23) might be seen in a positive light if inflation hadn’t been higher than the corporation’s profit growth in two out of these three years. IBM’s Yearly Profit Growth rates vs. yearly inflation rates were as follows: IBM’s 2020 profit growth was down -40.7% but inflation was up 1.2%; IBM’s 2021 profit growth was up 2.7% but inflation was up 4.7%; IBM’s 2022 profit growth was up 6.6% but inflation was up 8.0%; and finally, IBM’s 2023 profit growth was up 22.6% with inflation up 4.1%.

[Link to Profit Growth Charts]

-     IBM's 2023 Employee Profit Productivity
IBM’s 2023 Employee Profit Productivity was down .0006% (.000006) compared with the end of 2019. Again, like sales productivity, profit productivity was essentially flat with employees in 2019 and 2023 both producing profits of $24,573.

Unfortunately, unlike IBM’s profit productivity, inflation was not flat. Inflation was up almost 20%. ​To keep up with inflation IBM needed every one of its 305,300 2023 employees to produce $36,817 of profit instead of $24,753.

 [Link To Employee Profit Productivity Charts]

Arvind Krishna Market Value Performance Metrics
IBM’s 2023 Market Value over Arvind Krishna's four years of leadership was up $31 billion—an overall increase of 26% which included a market value increase of 17.4% in 2023. Inflation over this same four-year period was up almost 20%—at 19.2%. This four-year increase in IBM’s market value is the one place that IBM and Arvind Krishna have over achieved by producing three back-to-back years of positive market value growth, but most of these gains came in 2023, and with inflation still being a persistent threat, it is a wait-and-see game in this area.

IBM’s 2020 Market Value was down -8.5% but inflation was up 1.2%; IBM’s 2021 market value was up 10.3% while inflation was up 4.7%; IBM’s 2022 market value was up 6.3% but inflation was up 8.0%; and finally, IBM’s 2023 market value was up 17.4% while inflation was up 4.1%. Over this four-year period, if IBM’s market value had only kept up with inflation, its market value would have been $141.7 billion instead of $149.9 billion. In this area, from a short-term perspective, IBM was outperforming inflation, but from a long-term perspective, IBM has still lost 30% of its market value since 2011. It needs another gain in market value of 42.8% to get back to its centennial anniversary market valuation—a 2011–12 market value of $214 billion.

[Link to Market Value Performance Charts]​

Arvind Krishna Shareholder Returns and Risk Performance Metrics
-     IBM's 2023 Shareholder Returns
Shareholder Returns over Arvind Krishna's four years of leadership have increased 11.25% while, in comparison, the Dow Jones Industrial Average returned 9.45%, Large Company Stocks (S&P 500 Total Return) returned 12.04%, and finally, Dow Jones U.S. Technologies (DJUSTC) returned 21.58%. A stock investor would have gotten a significantly higher return with significantly less risk in a technology industry or a large stock industry fund rather than investing in IBM. This has been true for 20 out of the last 25 years considering an investment of $1,000 in 1999—and every single year for a similar investment in 2011.

[Link to Shareholder Returns Performance Charts]

-     IBM's 2023 Shareholder Risks
Shareholder Risk increased since the end of 2019 as Goodwill + Intangible Assets surpassed 50% of IBM’s Total Assets. Over the last three years, total intangible assets have been maintaining the 52%–53% range of total assets. IBM, Arvind Krishna and the board of directors have taken no action to reduce shareholder risk. If IBM were to fail, over 50% of its total assets are worthless with Goodwill alone now at 45% of total assets.
​
[Link to Shareholder Risk Performance Charts]

​Arvind Krishna Employment Performance Metrics
IBM Full-Time Worldwide Employment under Arvind Krishna’s four years of leadership has fallen by 78,500 employees since the end of 2019 to 305,300 employees—a decline of 20.5%. These numbers include what IBM calls its complementary workforce: an approximation of equivalent full-time employees hired under temporary, part-time, and limited-term employment arrangements.

[Link to Employment Performance Charts]
* All yearly inflation rates above were calculated using the Federal Reserve Bank of Minneapolis' inflation calculator.

What is provided through the links below are graphs of Arvind Krishna’s 2020-23 performance in these key performance indicator (KPI) areas.

​Charts are also provided for historical context that document (1) the joint performance of Arvind Krishna and Virginia (Ginni) M. Rometty from 2011-2023, and (2) IBM's overall twenty-first-century performance from 1999-2023 under the leadership of Louis V. Gerstner, Samuel J. Palmisano, Virginia (Ginni) M. Rometty, and Arvind Krishna.

Image of a hand balancing key corporate initiatives such as: productivity, leadership, and employee engagement and enthusiasm.
The 20th Century IBM was a High-Performance Corporation.
As you will see, Mr. Buffett corrected his mistaken investment in IBM by selling his holdings. Now is probably not the time to be an IBM stakeholder: shareholder, customer, employee or supportive society. The 21st Century IBM is not an elephant dancing or a battleship turning; it has been a battleship taking on water faster than the crew can pump it out, and the men and women in the pilot house have been failing to invest in what the employees needed to “man” the “boiler rooms” for more than two decades.

The company is fast approaching a point at which it will be powerless to control its fate.

Unless IBM can return to its sales-oriented history, it may find itself adrift at sea.
Links to the Details of Arvind Krishna's Key Performance Indicators (KPIs)
Select any of the buttons or images below to read the evaluation of Arvind Krishna's performance in the highlighted area.
Revenue and Profit
Corporations, within a capitalist economy, are worth an investment if they fulfil their main purpose: moving products of competitively higher value off the showroom floor into a customer’s waiting hands while generating enough profits to build, grow and protect a self-sustaining stakeholder ecosystem.
A high-quality, color slide with the tagline: Arvind Krishna's Overall Performance from 2020 to 2023: Revenue and Profit.
2023 Revenue and Profit ​Performance
A corporation needs to generate enough money (revenue and profits) to invest equitably to attract, hold and grow its stakeholder community of customers, employees, shareholders and their supportive societies.

Revenue and Profit Growth
​IBM positions its divestiture and acquisition strategy as moving the corporation into higher-value, higher-margin markets.

​The underlying assumption is that through these strategies the executive team will deliver increased revenues and higher profit margins: revenue and profit growth!
A high-quality, color slide with the tagline: Arvind Krishna's Overall Performance from 2020 to 2023: Revenue and Profit Growth.
2023 Revenue and Profit ​Growth Performance
Is Arvind Krishna delivering? How about his twenty-first-century predecessors?

Revenue and Profit Productivity
​​In a corporation of 305,300 employees, it is critical that each and every individual employee maximizes their productivity in generating revenue and net income. Some think that employee sales and profit productivity are an "employee" measurement, but in reality they are one of the best measurements to define the performance of a corporation's corner office.​
A high-quality color slide with the tagline: Arvind Krishna's Overall Employee Sales and Profit Productivity Performance from 2020 to 2023.
2023 Revenue and Profit Productivity Performance
When considering these two metrics, how is Arvind Krishna performing? ​What did he inherit from his predecessors: Rometty, Palmisano, and Gerstner?

ibm Market Value
In IBM's 1990 Annual Report, Lou Gerstner wrote that market value was the corporation's “most important measure of progress to investors.”

​Louis V. Gerstner used market value as one of his key business metrics to evaluate his success as chief executive officer.
A high-quality, color slide with the tagline: Arvind Krishna's IBM Market Value Performance from 2020 to 2023.
2023 Market Value Performance
Has IBM's market value grown in the twenty-first century? How is this "most important measure of progress" for investors performing? ​Using this measurement, how is Arvind Krishna performing?

Shareholder Returns and Risk
Since 1995, IBM has spent $201 billion on share buybacks. ​Of course, the shareholders should be happy with this reduction in the number of shares, right? So, why have the last three chief executive officers—Palmisano, Rometty and Krishna—buried their shareholder results in the last few pages of each years' annual report?
A high-quality, color slide with the tagline: Arvind Krishna's Overall Performance from 2020 to 2023: Shareholder Returns and Risk.
2023 Shareholder Risk and Returns Performance
Has the expenditure of $100 billion for 224 acquisitions since 2001 affected shareholder risk? Is IBM a risky investment: (1) Shareholder equity less the resulting goodwill says, "Yes!" and (2) buried at the end of IBM's 2023 Annual Report is a chart that also says, "Yes!"

Employment Security
Being of service or caring about stakeholders other than customers—especially when it concerns employees, is sometimes called paternalism. When Watson Jr. talked about employment security, he did not view it as paternalistic but as a means of increasing employee loyalty, goodwill, and diligence on the job.
A high-quality, color slide with the tagline: Arvind Krishna's Overall Performance from 2020 to 2023: Employment Security.
2023 Employment Security Performance
Employees are less efficient when worried about their employment. Maybe that is why sales and profit productivity keeps dropping when IBM's 2021 Annual Report states, "In response to changing business needs, the company periodically takes workforce reduction actions to improve productivity."

​The words they left out were to "improve 'short-term' productivity."

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