International Business Machines (IBM) agreed to pay more than $17 million to resolve federal allegations related to its diversity, equity, and inclusion policies, including claims that executive compensation was tied to demographic targets.
Arvind Krishna’s Role and the 2021 Video
The company’s chief executive, Arvind Krishna, who was born in India, has been a central figure in shaping the company’s diversity strategy. Numerous English-language Indian media outlets have reported that Krishna maintained legal status in the United States on an H-1B visa at some point early in his career. His professional background includes doctoral studies in electrical engineering at the University of Illinois Urbana-Champaign, completed in 1991, and a start at IBM in December 1990, according to publicly available professional profiles.
The settlement stems from allegations by the U.S. Department of Justice that IBM, as a federal contractor, “knowingly” made false claims about compliance with anti-discrimination laws while implementing policies that considered race and sex in employment decisions.
The agreement requires IBM to pay $17,077,043, including restitution, while not admitting liability, and the government did not concede its claims were unfounded.
According to the settlement text, the government contended that IBM tied “bonus compensation to achieving demographic targets,” including a “diversity modifier” affecting executive pay.
A 2021 video of Krishna previously obtained by the O’Keefe Media Group showed the chief explaining that IBM’s top brass were partially compensated based on how much they advanced diversity.
“So we take under-represented [racial groups] and gender, you got to move both forward by a percentage [every year] … That leads to a plus on your bonus, by the way, if you lose, you lose part of your bonus,” Krishna says in the video.
The executive would go on to explain that he wanted to see greater advancement in the hiring of blacks and Hispanics than of Asians.
Broader Context and Ongoing Implications
“Racial discrimination is illegal, and government contractors cannot evade the law by repackaging it as DEI,” Acting Attorney General Todd Blanche said in a statement announcing the settlement on April 10.
An IBM spokesman said the company was “pleased to have resolved this matter” and maintained that its workforce strategy is based on skills and client needs, according to a CNN report.
The allegations covered practices from January 1, 2019, through the effective date of the agreement, including the use of “diverse interview slates,” demographic hiring goals, and programs limited to certain groups based on race or sex. The government also alleged that IBM sought reimbursement under federal contracts for costs tied to those initiatives.
The case unfolds amid broader federal scrutiny of DEI programs under President Donald Trump’s administration, which directed agencies to dismantle diversity offices and pursued enforcement actions under the False Claims Act.
IBM’s public affiliations have also drawn attention. The company lists support for the United States Chamber of Commerce, which is currently involved in litigation against the Trump administration over immigration policy. That case includes a dispute over a $100,000 payment requirement tied to H-1B visas, as previously reported by The Dallas Express.
H-1B Workforce and Tech Industry Trends
IBM employed at least 15,000 H-1B workers across the U.S. between fiscal year 2020 and 2025, according to data from USCIS.
The role of foreign-born executives in major U.S. technology firms has also been part of the broader context. Several leading companies, including Microsoft under Satya Nadella, Alphabet Inc. under Sundar Pichai, and Adobe Inc. under Shantanu Narayen, are led by executives born in India, reflecting a trend in the sector.
Microsoft, Alphabet (Google), and Adobe each have corporate diversity policies, although these initiatives were reportedly rolled back or scaled back in 2025.
The IBM settlement does not resolve potential criminal liability and permits further administrative action by federal agencies, according to the agreement. It also requires the company to identify and repay certain costs deemed “unallowable” under federal contracting rules.