A committee of Dell's board of directors has approved a program authorizing up to $91 million to be used as cash bonus rewards to aid in the retention of certain key employees, including members of the executive leadership team, vice presidents and directors "who are critical to the company's future success," according to a filing with U.S. Securities and Exchange Commission.
Chairman and CEO Michael Dell is not included in the list of executives, according to the filing, which was dated April 17 but released Tuesday.
The executives on the "critical" list were not named, but the award recipients would be entitled to receive cash bonuses ranging from 0 percent to 100 percent of their respective base salaries, based on the company's fiscal year 2014 free operating cash flow performance.
This bonus will be payable in March 2014 if the executive is still employed by Dell. If the company terminates the executive without cause prior to the payout date, he or she is still entitled to receive 75 percent of the maximum retention award value, according to the filing.
Meanwhile, Michael Dell sent an e-mail to employees Tuesday to further explain what the company aims to do with the proposed $24.4 billion leveraged buyout by Silver Lake Partners.
"I want to be very clear about what we're trying to do and why. Going private will allow us to continue our transformation but do it much faster," Dell wrote in the e-mail to employees. "We will have private investors that share our strategic vision and are willing to see it through, even if it means making some tough trade-offs today to position us for success down the road. If we were to remain a public company, I believe it would be more difficult to move fast and aggressively because of the short-term focus of the market. The fact is, we can't afford not to continue investing for the future when you look at the opportunity ahead for us and our customers."
Dell also wrote in the email about recent meetings he had with employees in the company's Round Rock, Texas, headquarters, and in Austin, Texas, Oklahoma City, Okla., and Nashville, Tenn., and how he answered their questions about the company's strategy going forward.
"Our strategy is solid. We've aligned our business with the end-to-end needs of our customers -- end-user computing, enterprise solutions, software and services -- and invested roughly $10 billion to build our solutions portfolio. We've built or acquired a number of forward-looking capabilities that I believe are truly best-in-class. The world is headed in our direction toward modern, open, scalable architectures, and there are no plans to alter the strategy," he wrote.
Dell also answered employees' questions about how Dell plans to differentiate itself in the market. "First, unlike our competitors, we're not protecting legacy systems. We don't care about mainframes, niche chipsets, or any other industry relics. We're about the future and helping customers transition to next-generation solutions."
NEXT: Dell Says Midmarket Focus Is A DifferentiatorDell added that another differentiator is the company's focus on the midmarket, companies with 100 to 5,000 employees.
"This is by far the biggest segment of our addressable market and where the growth is happening, and none of the big IT companies are giving these customers much love. But we are. We are bringing a new class of capabilities within their reach. And third is our direct heritage. We know our customers, and the moves we're making today are 100 percent inspired by them," he wrote.
Dell ended the email by saying he is still committed to the company. Some reports have suggested that he may step aside or be asked to leave, depending on who ends up buying the company.
"Regardless of what you may read in the news, you should know I am a part of the conversations that concern the future of our company. This is a dynamic situation, as you saw last week with Blackstone's exit from the discussions," Dell wrote. "Meanwhile, the pending transaction for Silver Lake and me to take Dell private is continuing to move forward through the process. I am very confident we are headed toward a fantastic outcome for Dell, our customers and our team."
The letter marks at least the second direct communication from Dell to all employees in the past three months. He sent a Feb. 5 email after the proposed deal with Silver Lake was first announced.
PUBLISHED APRIL 24, 2013