Company Name: International Business Machines Corp.
Public Availability Date: December 5, 2006

Document Sections:

INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER

[INQUIRY LETTER]
November 13, 2006

Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549

Subject: 2007 IBM Proxy Statement Stockholder Proposal of Ms. Janet Krueger RULE 14a-8(e)(2) - Untimely Submission

Ladies and Gentlemen:

Pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, I am enclosing six copies of this letter, together with a stockholder proposal dated November 6, 2006 relating to executive compensation disclosure (the "Proposal") from Ms. Janet Krueger of Rochester, Minnesota (the "Proponent") (See Exhibit A).

IBM believes that the Proposal may properly be omitted from the proxy materials for IBM's annual meeting of stockholders scheduled to be held on April 24, 2007 (the "2007 Annual Meeting") for the reasons set forth below. To the extent that the reasons for omission stated in this letter are based on matters of law, these reasons are the opinion of the undersigned as an attorney licensed and admitted to practice in the State of New York.

THE PROPOSAL MAY BE OMITTED UNDER RULE 14a-8(e) BECAUSE OF ITS UNTIMELY SUBMISSION.

With respect to a proposal submitted for a regularly scheduled annual meeting, Rule 14a-8(e)(2) provides that it must be received at the company's principal executive offices not less than 120 calendar days before the date of the company's proxy statement released to shareholders in connection with the previous year's annual meeting. The Company's proxy statement for its 2006 annual meeting was dated and released on March 9, 2006 (See Exhibit B). Pursuant to Rule 14a-8(e)(1), the Company's proxy statement for its 2006 annual meeting informed stockholders that stockholder proposals for the 2007 annual meeting had to be received by November 9, 2006 to be considered for inclusion in the Company's 2007 proxy statement (See Exhibit C).

The Proponent sent the Proposal to IBM via US Certified Mail on November 7, 2006 from Rochester, MN (USPS Certified Mail Article # 7006 0810 0005 5905 9940) (See Exhibit D). However, it was not received by IBM until November 10, 2006, one day after the November 9, 2006 deadline. In this connection, the mailroom label affixed to the back of the certified letter states clearly that the letter from Janet Krueger was received on 11/10/06. (Exhibit E). Were this not enough, entering in the same Certified Mail Article # 7006 0810 0005 5905 9940 into the United States Postal Service's Internet "Track and Confirm" website1 confirms conclusively that such item was not delivered to IBM until November 10, 2006, at 10:10 a.m., one day after the Company's published November 9, 2006 deadline (See Exhibit F). As such, the Proposal was untimely received, and is subject to exclusion under Rule 14a-8(e)(2).

The Staff has made it very clear that it will strictly enforce the deadline for the submission of proposals without inquiring as to reasons for failure to meet the deadline, even in cases where a proposal is received only one (1) day late. See Hewlett-Packard Company (January 24, 2003); Dillard Department Stores, Inc. (March 13, 2001); Hewlett-Packard Company (November 9, 1999); Chevron Corporation (February 10, 1998); Norfolk Southern Corp. (February 23, 1998); see Snap-on Incorporated (February 22, 2006)(2 days late); The McGraw-Hill Companies, Inc. (January 22, 2002)(proposal dated before the deadline but not received until after the deadline excluded); Pitney Bowes Inc. (January 9, 2002)(to same effect); Xerox Corporation (March 9, 2000)(3 days late). See generally Celebrate Express, Inc. (September 29, 2006); Torotel, Inc. (August 22, 2006); and The Procter & Gamble Company (August 14, 2006).

Ms. Krueger is a very experienced stockholder proponent, having filed proposals with IBM for many years. Nearly all of her previous submissions have been included in the Company's proxy statements without challenge. The Proponent has also become keenly aware of the Commission's rules over the years, but this year, she failed to adhere to the submission deadline under Rule 14a-8(e)(2). This is a deficiency that cannot be remedied under Rule 14a-8(f). As such, the Company now respectfully requests the concurrence of the staff that the Proposal may properly be excluded from the Company's proxy materials for its 2007 annual meeting under Rules 14a-8(e)(2) and (f).

We are sending the Proponent a copy of this submission, advising her of our intent to exclude the Proposal from our proxy materials. The Proponent is respectfully requested to copy the undersigned on any response that she may choose to make to the staff. If you have any questions relating to this submission, you may contact me at 914-499-6148. Thank you very much for your attention and interest in this matter.

Very truly yours,

/s/

Stuart S. Moskowitz
Senior Counsel

copy, with exhibits, to:

Ms. Janet Krueger
1725 SE 8 Avenue
Rochester, MN 55904

-----FOOTNOTES-----
¹ http://www.usps.com/shipping/trackandconfirm.htm

[INQUIRY LETTER]

Janet Krueger
1725 SE 8 Ave.
Rochester, MN 55904

November 6, 2006

IBM
Office of the Secretary
New Orchard Road
Armonk, NY 10504

Attachments: Stockholder Proposal on Disclosure of Executive Compensation Letter from Merrill Lynch dated November 6, 2006

Sir:

Attached is a resubmission of my IBM stockholder proposal titled "Full Disclosure of Executive Officer Compensation" for inclusion in the 2007 Proxy.

My name is Janet Krueger. I reside at 1725 SE 8 Ave., Rochester, MN 55904. I own 32 shares of IBM stock, and have held over $2000 worth of stock in my retirement portfolio since October of 2001. The attached letter from Merrill Lynch verifies my IBM shareholder status. It includes my name, my account name, and value of shares held. I will retain shareholder status of this stock throughout the 2007 IBM Stockholder Meeting period. I will be in attendance at the shareholder meeting and will present my stockholder proposal to the shareholders at that time.

Thank you for your attention to this matter. If you have any questions, concerns, or problems with the resolution, please do not hesitate to call me at 507 289 9030. My e-mail address is janet.krueger@prodigy.net.

Sincerely,

/s/

Janet Krueger

[APPENDIX]
Full Disclosure of Executive Officer Compensation

WHEREAS compensation for IBM's executive officers is listed in the annual report, but their total compensation and related company liability is not readily discernable by some professional investors or by the average shareholder; and

WHEREAS this leaves shareholders with an inadequate and incomplete picture of the company's future liabilities on behalf of those executive officers;

RESOLVED that IBM's Board of Directors establish a policy and practice to provide full and transparent disclosure of all forms of compensation issued and promised to Company executive officers. This should include, but not be limited to, their salary, bonuses in all forms, loans, and their share of deferred compensation schemes such as 401k, EDSP and the IBM Savings Plan, stock options, life insurance, retirement benefits and any other perks which constitute a current or future liability for shareholders of over $2000. This disclosure shall be made in plain English and in dollar terms using industry accepted accounting principles, including the total benefits paid in the prior year, the total projected obligation, and the plan assets set aside to cover that obligation, for each of the executive officers.

SUPPORTING STATEMENT:

The import of full executive compensation disclosure is exemplified in a Wall Street Journal Europe article dated 6/23/2006 and titled "Hidden BurenAs Workers' Pensions Wither, Those for Executives Flourish.", which cites:

"This is the pension squeeze companies aren't talking about: Even as many reduce, freeze or eliminate pensions for workerscomplaining of the costs their executives are building up ever-bigger pensions, causing the companies' financial obligations for them to balloon. Companies disclose little about any of this. But a Wall Street Journal analysis of corporate filings reveals that executive benefits are playing a large and hidden role in the declining health of America's pensions. Among the findings:

Boosted by surging pay and rich formulas, executive pension obligations exceed $1 billion at some companies. Besides GM, they include ... International Business Machines Corp. (about $1.3 billion).

These liabilities are largely hidden, because corporations don't distinguish them from overall pension obligations in their federal financial filings.

As a result, the savings that companies make by curtailing pensions for regular retireeswhich have totaled billions of dollars in recent yearscan mask a rising cost of benefits for executives.

Executive pensions, even when they won't be paid till years from now, drag down earnings today. And they do so in a way that's disproportionate to their size, because they aren't funded with dedicated assets....

In January, IBM said it will freeze the pensions of all U.S. employees and executives. The move reduced its pension liability by $775 million. IBM cited pension costs, volatility, and unpredictability. It didn't mention that a quarter of its U.S. pension expense last year resulted from pensions for several thousand of its highest-paid people.

We urge shareholders to vote FOR this proposal.

[STAFF REPLY LETTER]
December 5, 2006

Response of the Office of Chief Counsel Division of Corporation Finance

Re: International Business Machines Corporation Incoming letter dated November 13, 2006

The proposal relates to compensation.

There appears to be some basis for your view that IBM may exclude the proposal under rule 14a-8(e)(2) because IBM received it after the deadline for submitting proposals. Accordingly, we will not recommend enforcement action to the Commission if IBM omits the proposal from its proxy materials in reliance on rule 14a-8(e)(2).

Sincerely,

/s/

Ted Yu
Special Counsel