IBM Names Rometty as Chief Executive to Succeed Palmisano
Vendor taps 30-year veteran, current global sales leader, to replace Palmisano. Company also says it will add $7 billion to stock repurchase program to total $12.2 billion.
IBM Corp. said that Virginia (Ginni) M. Rometty will succeed Samuel J. Palmisano as the company’s new president and chief executive effective January 1, 2012.
Rometty, 54, currently serves as IBM senior vice president and group executive for sales, marketing and strategy. She also has been elected to IBM’s board, effective at the time she takes the company’s helm.
IBM said that Palmisano, who was named IBM’s chief executive officer in 2002 and chairman of the board in 2003, will retain the latter position. At 60 years old, he is at an age where IBM’s chief executives traditionally have stepped aside.
With her elevation to IBM’s top spot, Rometty joins Hewlett-Packard Co.’s Meg Whitman and Xerox Corp.’s Ursula Burns in a small group of women chief executives in the IT industry.
"Ginni Rometty has successfully led several of IBM's most important businesses over the past decade from the formation of IBM Global Business Services to the build-out of our Growth Markets Unit," said Palmisano in a statement.
Rometty, who is well-known within the IT community, currently is responsible for IBM’s worldwide results, including revenue, profit and client satisfaction in the vendor’s 170 global markets. IBM recorded just shy of $100 billion in global sales in 2010.
In her prior position as vice president of IBM’s Global Business Services, Rometty managed the integration with IBM’s internal group of consultants gained from the vendor’s $3.5 billion acquisition in 2002 of PricewaterhouseCoopers.
"But she is more than a superb operational executive,” Palmisano said. “With every leadership role, she has strengthened our ability to integrate IBM's capabilities for our clients,” he said. “She has spurred us to keep pace with the needs and aspirations of our clients by deepening our expertise and industry knowledge.”
Palmisano praised Rometty’s “strategic thinking and client focus” particularly in IBM growth initiatives such as cloud computing and analytics. He called her the “ideal CEO to lead IBM into its second century.”
Rometty, who holds a Bachelor of Science degree from Northwestern University in computer science and electrical engineering, joined IBM in 1981 as a systems engineer.
"There is no greater privilege in business than to be asked to lead IBM, especially at this moment,” she said.
Palmisano is credited with shepherding IBM’s exits from the PC, printer and hard drive businesses, directing its technology and business investments, overseeing expansion into emerging markets and guiding its Smarter Planet initiatives.
Under Palmisano, IBM has concentrated on enterprise and government sales, increasingly relying on services and software to define its industry solutions. During his tenure, IBM’s earnings-per-share (EPS) has increased by nearly five times and the company has created more than $100 billion of shareholder value through increases in market capitalization and dividends paid. In addition, the vendor has poured some $50 billion into research and development.
“Sam had the courage to transform the company based on his belief that computing technology, our industry, even world economies would shift in historic ways,” Rometty said.
Separately, IBM said that it will repurchase an additional $7 billion in stock either on the open market or in private transactions. With some $5.2 billion remaining at the close of September from a prior authorization, the company said it intends to buy back up to $12.2 billion of its stock.
In addition, the vendor said that it will request another share repurchase authorization at its April 2012 board meeting.