IBM chief got $18.8 million in 2006

NEW YORK (CNNMoney.com) -- IBM CEO Sam Palmisano earned $18.8 million in compensation in 2006, as the world's biggest computer services company posted its best year under his leadership.

Palmisano took home $1.75 million in salary and a $5 million bonus, according to the company's proxy statement released Monday. (See correction). In 2005, he earned a salary of $1.68 million and a bonus of $5.2 million.

IBM CEO Sam Palmisano

Additionally in 2006, he earned more than $11 million in stock-based compensation, including $3.3 million in stock options. The other $7.8 million represents the value of shares that he will be awarded in 2009 if IBM exceeds certain performance benchmarks.

He also received $922,000 in other benefits, including personal travel on company planes and 401(k) contributions from IBM.

2006 was Palmisano's best year at IBM, as the company made $9.5 billion in net income, and shares of the tech giant rose 18 percent.

Shares of IBM (Charts) rose about 1 percent on the New York Stock Exchange Monday.

IBM's stock has outperformed those of its main competitors over the past six months, rising 14.4 percent. EDS (Charts) has gained 13.8 percent, Hewlett-Packard (Charts) has added 9.3 percent and Microsoft (Charts) has climbed 5.8 percent.

(Correction: An earlier version of this story mistakenly said Palmisano's bonus was $5.3 billion. CNNMoney.com regrets the error. Return to story)

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