by Anton Shilov
09/15/2010 | 10:35 PM
Samuel Palmisano, the chairman and chief executive officer of IBM, who turns sixty next year, said that the company's informal rule for top executives to retire at the age of sixty was not cast in stone and he had no plans to step down in 2011. In addition, he criticized rival HP for not investing into development of new technologies and services.
For many years chief executive officers of IBM had a tradition to retire at the age of sixty. The policy is not published, though, and Mr. Palmisano has served IBM quite successfully and it is unlikely that he would be forced out.
“There’s no formal policy [to retire from IBM at the age of sixty]. I am not going anywhere," said Sam Palmisano, reports Bloomberg news-agency.
Since taking the CEO position eight years ago, Mr. Palmisano has sold personal computer business to Lenovo and further redesigned hardware businesses to focus IBM on more lucrative software and services through more than 100 acquisitions. At present IBM is the third-largest software maker behind Microsoft Corp. and Oracle Corp. Still, IBM earns less money than HP or Hitachi despite of having the more employees than the former and the same amount as the latter.
But Samuel Palmisano criticized Mark Hurd, the former chief executive officer of HP for cutting research and development (R&D) costs and projects.
"HP used to be a very inventive company. IBM would never have paid what HP did to buy data-storage provider 3Par. HP had no choice: Hurd cut out all the research and development," said Mr. Palmisano said in an interview at a Wall Street Journal event.
Mark Hurd cut HP's R&D budget to $2.8 billion, or 2.5% of HP's revenue, in its last fiscal year from $3.5 billion, or 4% of earnings, in 2005, when he took over as CEO. Under Mr. Palmisano, IBM has continued to invest about 6% of its revenue in R&D, including $5.8 billion last year.