IBM's Palmisano mulls CEO successor

Two top insiders said to be the leading candidates, WSJ reports

Palmisano_1.jpgPhoto credit:REUTERS/Tobias Schwarz

The Wall Street Journal says that IBM chief executive Sam Palmisano is hard at work trying to determine his successor.

Palmisano, who turns 60 next month, is expected to "designate a successor by appointing a president or operating chief in 12 to 18 months," the WSJ reports being told by "people familiar" with Palmisano's thinking.

(Also see: Apple not only company that needs CEO succession plan)

While there's always a chance other candidates could emerge, the WSJ says these are the main contenders:

The top candidate is sales chief Virginia M. Rometty. The 53-year-old executive has separated herself from the pack over the last year, according to recruiters and former and current IBM executives. Global Services boss Michael E. Daniels, 56, is seen as the No. 2 choice. Rodney C. Adkins, 52, who is senior vice president for hardware, faces longer odds.

The article goes into some detail about the strengths and potential weaknesses of each candidate. There is no mention of anyone outside the company being considered.

Interestingly, one person "familiar with the matter" tells the WSJ that Palmisano "is trying to create a succession process that doesn't turn into a divisive, public horse race in which losers quit."

That was one of the fears raised earlier this year by people who argued against Apple creating a public succession strategy.

While proponents of a public succession plan argued that it was especially critical given chief executive Steve Jobs's ongoing health problems and indefinite medical leave of absence, opponents cited several reasons why it was a bad idea, one of them being that talented people who weren't being considered for CEO would leave.

Granted, that's always a possibility, but the important thing is for a company -- whether it's IBM, Apple or another firm -- to choose the right CEO. No negative fallout from choosing the right candidate could be as damaging as picking the wrong chief executive.

IBM already has taken some steps to avoid the "loser" storming off. The WSJ reports that Big Blue's board of directors approved $5 million in stock awards for Rometty and Daniels on the condition that they stay with the company through 2013.

That's a pretty big inducement to get over your disappointment.

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