EDS looking for fresh blood at the top

Electronic Data Systems (EDS) said it will appoint an outsider as its next head, following the decision of chairman and chief executive officer, Lester Alberthal, to retire.

Alberthal said he was retiring to spend more time with his family and on other interests. He has led the Plano, Texas based services company since the departure of its founder and only other chairman, former presidential candidate Ross Perot.

EDS said Alberthal will remain with the company until the directors have found a replacement chairman and CEO, who will be from outside the company, a move that may go some way towards soothing recent dissatisfaction among investors. At the company's annual meeting in May, 21 per cent of shareholders supported a proposal to hire an independent chairman.

The proposal was put forward by the world's largest private pension fund, the California Public Employees' Retirement System (Calpers), which owns 2.7 million EDS shares. The fund is believed to be still pushing for EDS to hire two separate people for the chairman and CEO roles.

The office of the chairman in EDS has two other members, vice chairman Gary Fernandes, and president Jeffrey Heller. EDS is still looking for a chief financial officer after the previous incumbent, Joseph Grant, left in March.

Alberthal said it was a good time to leave EDS, with the company now fully independent from former parent General Motors, and in the process of returning to consistent growth.

Under his leadership EDS grew annual revenue from $4 billion to $15 billion, and he successfully took the company independent in 1996. However, it was forced to undergo a round of cost and job cutting after the spin-off, and shares have not yet recovered.

EDS also announced seven promotions of senior executives, including John Bateman, chairman of the executive board for the Emea region - he will become executive vice president.