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He is claiming undisclosed aggravated and exemplary damages for loss of contract, earnings and injury to his health and feelings.
IBM wont say, for example, what percent of total contract earnings it books on its contracts each year.
But this much is known: Overly optimistic contract earnings assumptions have caused headaches recently for competitor Electronic Data Services (see box).
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The lack of details make it difficult to gauge the effect of the contract on earnings, but it could slow growth, he said.
We examine whether an individual's identity with the firm influences the agency costs associated with incentive contracts, namely earnings manipulation.
The contract dispute, over earnings and track closures during future construction, was settled in November.
He said that "fewer than anticipated contract signings" reduced earnings, but that he was "optimistic" about short-term revenues.
If earnings contract 3percentthethe P/E ratio of the S.& P., based on current prices, would be closer to 17, or higher than the historical norm.
BAE does not include US defence budget supplemental contracts in its earnings guidance.
But EDF Energy was also forced to write down several commodities hedging contracts, reducing its earnings to €944m (£852m) on sales up 13.3% at €8.2bn.
Verizon Communications said on Monday that sales of more expensive wireless contracts helped drive earnings up nearly 10percentt during the first quarter, offsetting declines in traditional phone service.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com