IBM on Tuesday named Samuel Palmisano CEO effective March 1 to replace Louis Gerstner, who was widely expected to step down this year.
Gerstner, whose contract expires on March 1 when he turns 60, will remain chairman through the end of 2002. He is credited with turning the computer maker around in the 1990s.
Palmisano has been expected to follow in Gerstner's footsteps since he was named president and COO in July of 2000. He will retain his title of president, IBM says.
IBM shares were off 3 percent, or $3.71, at $104.50, in midday New York Stock Exchange trading.
"Over the last decade, Sam Palmisano has taken on a number of IBM's most significant challenges, from building the services business to transforming our server line," Gerstner said in a statement.
Gerstner joined IBM in April of 1993 and helped push the company to build its services business, which is now its largest division in terms of revenues.
IBM also announced John Thompson, who is vice chairman, will retire from the company and its board on Sept. 1.
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Here's how VARBusiness readers felt about the possibility of Gerstner's retirement this past May:
Do you think it is time for IBM's Louis Gerstner to retire?
Yes. IBM could use some new blood. - 27.2%
No. Why change a good thing? - 63%
Yes. But I worry about who would step in. - 9.9%