Profit Per Employee by IBM CEO

Comparing IBM CEO Profit Per Employee
Date Published: August 6, 2021
Date Modified: June 29, 2024
 IBM Chief Executive Officers' Profit (Net Income) Per Employee
Net income per employee is a common productivity metric that determines how effectively a corporation is managing its bottom line. It is an effective method to visualize management effectiveness over time. Though it is only one of many measures for considering the overall health of a corporation, this particular one—especially when evaluated over extended periods of time as in the 100+ year chart below—is effective in showing gains or losses in an organization’s management effectiveness.

Research should be done, though, to determine if the executive team used either aggressive bookkeeping or financial engineering to inflate its short-term profit productivity (and profits) at the expense of the long-term health of its core business.

This measurement can be subject to more high-level executive "gamesmanship" than sales productivity.
 Summary of IBM CEO Profit (Net Income) Per Employee
  • Largest Profit Per Employee Increases:​

    Tom Watson Jr.'s 215% growth in profit productivity over 16 years far exceeds any other chief executive officer. Watson Jr. invested in making people more productive, processes more effective, and products more valuable.
  • ​Largest Profit Per Employee Decreases:

    John F. Akers' 188% decrease in profit productivity after shipping the AS/400, System/390 and RS/6000 stands alone. His fall was not for lack of shipment of customer-driven products. The old saying of, "Snatching defeat from the jaws of victory" comes to mind.
  • Most Questionable Profit Per Employee Increases

    Samuel J. Palmisano's string of profit productivity increases. His time as chief executive officer is marked by aggressive bookkeeping (pension reductions) and financial engineering (workforce rebalancing and share buybacks) at the expense of investing to make people more productive, processes more effective, and products more valuable.

    John R. Opel's increases in profit productivity through his lease-to-purchase conversions of the late 1980s. This was a plan, unlike Sam Palmisano's above, that also delivered higher sales productivity.
 At a Glance: Examining a Century of Profit (Net Income) Per Employee
  • Largest Profit Per Employee Increases: Post System/360 and System/370, Post 1992-93 Financial Crisis
  • Largest Profit Per Employee Decreases: Financial Crisis of 1992-93, Post 2013
 At a Glance: Examining Two Decades of Profit (Net Income) Per Employee: 1999 – 2020
  • Largest Profit Per Employee Increases: 2005 to 2013
  • Largest Profit Per Employee Decreases: 2013 to 2020
 Thomas J. (Tom) Watson Sr.: May 1914 – May 1956
  • Largest Profit Per Employee Increases: Post Recession of 1920-21, Post World War II
  • Largest Profit Per Employee Decreases: Recession of 1920-21, The Great Depression, WW II and Korean War
 Thomas J. (Tom) Watson Jr.: Jun 1956 – May 1971
  • Largest Profit Per Employee Increases: 1956 to 1958, Post 1965 S/360 Shipment
  • Largest Profit Per Employee Decreases: Post 1964 S/360 Announcement (delayed shipment)
 T. Vincent (Vin) Learson: Jun 1971 – Dec 1972
  • Largest Profit Per Employee Increases: Post S/370 Shipment
  • Largest Profit Per Employee Decreases: Not Applicable
 Frank T. Cary: Jan 1973 – Dec 1980
  • Largest Profit Per Employee Increases: Stable increases over full decade
  • Largest Profit Per Employee Decreases: 1979
 John R. Opel: Jan 1981 – Jan 1985
  • Largest Profit Per Employee Increases: Stable increases over full four years
  • Largest Profit Per Employee Decreases: Not Applicable
 John F. Akers: Feb 1985 – Mar 1993
  • Largest Profit Per Employee Increases: 1990 with S/390 and RS/6000 Availability
  • Largest Profit Per Employee Decreases: 1989, 1991 and 1992
 Louis V. (Lou) Gerstner: Apr 1993 – Feb 2002
  • Largest Profit Per Employee Increases: 1994 to 1996, 1999 with pension plan changes
  • Largest Profit Per Employee Decreases:  Flat from 1996 to 1998 and 1999 to 2001
 Samuel J. (Sam) Palmisano: Mar 2002 – Dec 2011
  • Largest Profit Per Employee Increases: 2008 to 2011 with U.S. and UK Pension Plan Changes
  • Largest Profit Per Employee Decreases: 2002 with Change from Gerstner to Palmisano
 Virginia M. (Ginni) Rometty: Jan 2012 – Mar 2020
  • Largest Profit Per Employee Increases: Increase from 2017 to 2019
  • Largest Profit Per Employee Decreases: Drop from 2013 to 2017
 Arvind Krishna: Apr 2020 – Present
  • Largest Profit Per Employee Decreases: Significant Drop in First Year
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