Kyndryl CEO Short Term Incentive

I suspect we will see short term actions to try to get short term pops on Kyndryl's stock based on the CEOs (and the rest of the C-suite's) Restricted Stock Units vesting dates.

When does a Long Term Incentive Plan become a Short Term Incentive Plan?

According to Kyndryl's own Form 4 provided to the SEC last week, Martin Schroeter's 577,640 RSUs ALL vest within the next 2 years. That's pretty short by any standard objective for a CEO. But it gets worse.

Of those 577,680 RSUs, Mr. Schroeter has 300,885 RSUs that vest in the next 7 months! Over 52% of his RSUs are very short term.

The CEO then has 425,767 RSUs that vest in the next 12 months - that is 73% in the next year. Remember, IBM has held on to 20% of its Kyndryl shares and has said they plan on selling in the first 12 months. IBM did hire him. IBM appears to have hedged their bet here.

Furthermore, for those of you who have been watching this, Kyndryl has said their revenue will continue to shrink until 2025, and then they will begin to grow. You would think the leadership would have their own equity lined up with that.

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IBM+KD = $107.5B now .. expect layoffs in both.

Combined market cap of IBM + KD is now down to $108.5B.

Interestingly, Globalfoundries GFS, is now worth 1/3 of all that and rising .. IBM got out of the chip-making business just a few years before the biggest bo-m ever. Seems to be a pattern of IBM exiting businesses because they are not profitable immediately - no long-term vision or stamina. In this case it was pretty obvious that the world was not going to stop using chips.

Titanic has finally seen the iceberg.

to about $110B today

Another day, another billion market cap lost. Down to $109B for IBM+KD.

Kyndryl is crashing to its intrinsic value (Its customer base). At what price will one of their competitors get out their check book to buy their customers. IBM did the right thing dumping GTS as GTS is servicing a pile of contracts that are unprofitable and will continue to be for at least two years. I expect a large percentage of those contracts to be abandoned, and Kyndryl to downsize as they walk away vs renew them. Will Kyndryl survive Of course, BUT as a much smaller player if they are not acquired It’s ugly, and about to get much uglier. DXC = 8 billion market cap on 16 billion of revenue. Kyndryl = 4.5 billion market cap on ??? (How much future revenue) You can do the math

In two years there may not be much value in KD left. This NewCo debacle has seen the combined market cap of IBM+KD drop 15% (to about $110B today) from when it was just $129B IBM a month ago, and a lot of that drop is just KD dropping like a rock.

No surprise there. Schroeder Is doing exactly what he did at IBM. Why is anyone expecting anything different?

Date Vesting Cumulative Percentage
12/31/21 134,326 134,326 23%
5/3/22 124,882 259,208 45%
6/7/22 26,990 286,198 50%
6/8/22 14,687 300,885 52% <<< More than half vest in 7 months
11/3/22 124,881 425,767 74% <<< 74% vest in the next year
6/7/23 26,990 452,758 78%
11/3/23 124,882 577,640 100% <<< All within 2 years

Your numbers aren't adding up for me.

Do you mean "then has 151,873" not "then has 425,767" ?

So at least two more years of Kyndryl doing financial engineering IBM style? Why am I not surprised?

Thread regarding IBM layoffs

Kyndryl CEO Short Term Incentive

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