IBM Corp shares saluted the imminent departure of John Akers with a jump of $3.25 at $52.125 at the opening yesterday after the company accompanied news that it was cutting its quarterly dividend only 55% with the announcement that within 90 days it would have a new chief executive. There are also sweeping management changes. John Akers will retain the posts of chairman and chief executive during the search period and the company is not yet saying whether he will remain titular chairman thereafter. The search for a new chief, to be led by Akers and managed by IBM’s board nominating and executive compensation committee, which is chaired by James Burke, a former chairman of Johnson & Johnson, will be conducted both within and outside the company, and IBM has given itself 90 days to complete the process. Chief financial officer Frank Metz, 59, is retiring and will be succeeded by returnee Paul Rizzo, who was elected a vice-chairman; Jack Kuehler, 60, gives up his post as president and becomes another vice-chairman. It is the right time in IBM’s business transformation to identify new leadership, Akers said. The changes in the industry and in IBM’s business continue to accelerate and new leadership will facilitate our ability to meet those challenges. The quarterly dividend for the fourth quarter was cut 55.4% to 54 cents a share from $1.21, and it could be cut further next quarter once the new man is in charge. The assumption is that Rizzo’s appointment to the finance post is a short-term measure and that his key function will be to work out a new pricing strategy, which means that anything we have heard on pricing on the new ES/9000s and AS/400s due next month will likely be overtaken by events. Few are in any doubt that there is plenty more pain to come, and it may well be that the interim management is now expected to clear the decks, steel itself to announce another enormous net loss for the current quarter and let the new chief executive and team come in with a clean sheet.
