IBMs board of directors today elected Samuel Palmisano to succeed Louis Gerstner as chief executive of the giant computer maker on March 1. Gerstner, who has led the company since 1993, will remain as chairman through 2002 before retiring.
Palmisano, 50, has been viewed as Gerstners heir apparent since his appointment as president and chief operating officer in July 2000.
"Im truly excited to lead IBM in this next chapter of what already is an impressive era," Palmisano said in a statement released today.
Since joining IBM as a sales representative in 1973, Palmisano has steadily climbed through the massive companys corporate ranks, eventually holding leadership positions in nearly all of its major business units.
During his three-year tenure as head of IBM Global Services, the divisions revenues grew 30 percent to $32.2 billion and became the computer makers largest business unit. Palmisano also spearheaded the companys embrace of Linux software while serving as head of IBMs server and storage business.
"Sams unique mix of strategic vision, passion and discipline, combined with his intimate understanding of IBM, make him the right person to become IBMs next CEO," Gerstner said in a statement released today.
In accepting his promotion today, Palmisano lavishly praised his predecessor.
"I feel very fortunate to succeed Lou Gerstner as CEO," Palmisano said a release. "Against all odds, he led IBM back from its darkest days. He transformed the companys culture and reignited growth."
In recent months, rumors have swirled about when Gerstner would retire. Prior to todays announcement, Gerstners contract was set to expire on March 1, his 60th birthday.
Unlike IBM-lifer Palmisano, Gerstner was a computer industry outsider in 1993 when he was lured away from his post as CEO of RJR Nabisco and named chief executive of IBM.
Gerstner took over the company during one of its most turbulent periods, with the computer maker posting massive losses, blamed in large part on its inability to rein in costs and adapt to rapidly changing market conditions. In 1993 alone, IBM posted a loss of $8.1 billion.
Gerstner quickly shored up his power, reappointing longtime executives to break down the companys insular culture, adding business-savvy workers from outside IBMs ranks, slashing operating costs and redirecting the longtime hardware maker to put greater emphasis on technological innovation, customer services and software.
His efforts have paid off handsomely, with the companys stock rising more than 800 percent and market value climbing more than $180 billion since 1993.
Also today, IBM announced that Vice Chairman John Thompson will retire from the company and board on Sept. 1.
Thompson, 59, was credited with building IBMs Software Group into a $13 billion business, and headed up the acquisitions of Lotus Development Corp. and Tivoli Systems. He also served as president and CEO of IBM Canada in the 1980s.