She is “more than a superb operational executive,” Palmisano, who is keeping his job as chairman, said in a statement.
IBM’s stock has more than doubled since the depth of the recession in 2008. Meanwhile, HP stock has fallen by about 50 percent.
A series of scandals has led to turmoil at the top of HP, with former CEO Mark Hurd resigning under pressure last year over ethical violations, and his successor, Leo Apotheker, being fired after less than a year on the job after fumbling an important restructuring.
One of Whitman’s first moves was to accelerate a decision about whether HP will sell, spin off or keep its personal computer business, the largest in the world by sales. Investors seem undecided about what course they want HP to take. Some analysts worry that Apotheker did irreparable harm to the brand by announcing it was for sale before a buyer had been found, making it potentially hard to sell and hard to keep.
Analysts have generally said that both women are right for their roles _ HP needs Whitman’s star power to woo Wall Street while IBM needs a steady operator with broad experience like Rometty to continue IBM’s predictable, steady growth.
IBM dates to June 16, 1911, when three companies that made scales, punch-clocks for work and other machines merged to form the Computing Tabulating Recording Co. The modern-day name followed in 1924.
It had a boys’ club image but shed it long ago. Rometty’s status as a front-runner for the CEO job was a poorly kept secret. Industry insiders have whispered about it for years, and Tuesday’s announcement was only a mild surprise because of its timing.
IBM CEOs have traditionally stepped down at 60 years old, but Palmisano had tamped down talk of his retirement, insisting that he wanted to stay on as chief. In rare public comments, he said last year that he was “not going anywhere” and that there’s no formal policy at IBM dictating when a CEO should retire.
Bobby Cameron, an analyst with Forrester Research who has worked with IBM in various roles over the years, said that in meetings with Rometty is “engaging” and inquisitive. Her interest in emerging technologies, not just the established sales leaders, is an important characteristic. Cameron thinks she’s an ideal choice to continue Palmisano’s work.
“I think she’s smart. She asks questions; she doesn’t just come in with an agenda, and she’s interested in the leading edge, not just what’s driving volume _ all those things are important for a CEO to have,” Cameron said.
Palmisano has the same characteristics, Cameron said.
“I think it will be more of the same, and I think that’s a good thing,” he said.
Nevertheless, investors’ reaction was muted. IBM shares fell 51 cents, or 0.3 percent, to $179.85 in midday trading Wednesday, the first day of trading following the announcement.
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