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Dell CEO opted for options, not cash

Michael Dell gave up part of his bonus for a discounted stock option grant, an SEC filing reveals. The PC maker also says his base salary is lower than his fellow CEOs'.

When given the choice between discounted stock options or a cash bonus, Dell Computer Chief Executive Michael Dell took the stock.

In a Securities and Exchange Commission filing, the company said its CEO got a raise, but that his bonus fell from a year ago. However, Dell, along with other top executives, got healthy stock option grants.

For fiscal 2002, which ended Feb. 1, Dell's salary was $925,962, with a bonus of $347,236. In 2001, Dell's salary was $892,308, with a bonus of $1.67 million.

Dell's salary "remains below the median base salary earnings for chief executive officers of the peer group of companies," the company's compensation committee said in the proxy filing.

The company said its CEO got a smaller bonus because the company's revenue growth fell short of "aggressive internal goals." The CEO could have received another cash payment tied to the company's increased unit shipments, but he "elected to forgo this bonus in lieu of a discounted stock option grant," the company said.

Under the company's executive stock plan, stock options were granted March 23 to key executives, giving them the choice to forgo all or some of their bonus to get discounted options with a two-year vesting schedule.

The CEO's decision to forgo a portion of his annual bonus for stock options netted him an additional 307,285 shares in March. He was granted 1 million stock options in fiscal 2002.

Dell's CEO already owns 11.8 percent of the shares outstanding as of April 30. The stock options' strike prices, the prices at which the stock can be bought profitably, range from $21.72 to $24.09.

It was a similar story for other top Dell executives.

Chief Operating Officer Kevin Rollins had a fiscal 2002 salary of $721,154, up from $688,462 in 2001. Rollins' 2002 bonus was $243,389, down from $1.15 million in 2001. Rollins was granted nearly 5.4 million stock options in fiscal 2002, the largest sum of any of the top executives.

The salary of James Vanderslice, Dell's vice chairman, was up from a year ago, but he received a lower bonus. Vanderslice and Rollins, like Dell's CEO, decided to give up a portion of their bonuses to take the stock options.

Paul Bell, senior vice president of Europe, the Middle East and Africa, and Joseph Marengi, senior vice president of the Americas, also got raises but had their bonuses cut. Bell also skipped some of his bonus for stock options.

Dell will hold its annual meeting July 18.