No Bonus for You! – Dell to his employees

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No Bonus for You! - Dell to his employees

Round Rock (TX)- Michael Dell is putting some Dell senior executives on the chopping block and is promising to cut all bonuses for the 2006 year. Mr. Dell made the announcements in a company-wide email he sent on Friday afternoon. He also says that his company has become a bureaucratic nightmare which is in sharp contrast to the lean and mean early years.


The entire email is posted on the Austin America-Stateman’s website and documents more than a dozen managerial and staff-level changes. All employees will not receive a bonus for the 2006 because of the company’s poor performance, but Mr. Dell promises that some limited bonuses will be available for next year. In addition, stock vesting times, the time it takes for stock options to become freely exercisable, will be reduced from five to three years.

Dell also promises to trim the executive staff from more than 20 to 12. For the foreseeable future, there will also be no Chief Operating Officer. In the email, Dell says, “We have great people . . . but we also have a new enemy: bureaucracy, which costs us money and slows us down. We created it, we subjected our people to it and we have to fix it!”

Mr. Dell cautioned employees that there will be a tough couple of quarters ahead, but added that he will not abandon them. “We are not doing a COO or CEO search. I plan to be CEO for the next several years,” said Dell.

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