Robert Palmer says he'll leave Digital in July

On the eve of a shareholder vote on Compaq Computer Corp.'s merger with Digital Equipment Corp.

On the eve of a shareholder vote on Compaq Computer Corp.'s merger with Digital Equipment Corp., Compaq outlined the management structure of the new company, which completely subsumes the Tandem division.

And in a widely expected move, Digital (DEC) CEO Robert Palmer will step down at the end of July. Palmer had previously announced that he would stay through the completion of the deal. In a separate statement today, the company stated the details of his departure.

Shareholders are scheduled to vote on the merger Friday; Compaq (CPQ)also scheduled a press conference on the same day to discuss the integration of the companies.

Day of reckoning nears for Digital.

Enrico Pesatori, who had been president of Tandem, will become senior vice president of marketing, and will report to Compaq CEO Eckhard Pfeiffer and to Michael Heil, Compaq senior vice president of worldwide sales and marketing.

The Tandem division, which was acquired by Compaq last June for $3 billion, will be consolidated with Compaq's Enterprise Products group in a new Enterprise Computing group, which will be headed by John Rose. Rose will also oversee the Alpha and Open VMS development that was brought on board with the Digital acquisition.

It was not clear what would happen to the Tandem brand name. At the time of the Digital announcement merger, Compaq executives said that the integration of Tandem was just being completed.

Compaq spokesman Jim Finlaw said today that Compaq will be the "corporate brand" but that the company had not completely decided what to do with the other brands.

Important brands
"Both Tandem and Digital are very important brands. We have that challenge of getting the most from our corporate brand and the other brands and it will take time to work through," said Finlaw.

While Tandem operated as a separate company for at least a year, that will not be the case with Digital, Finlaw said. "From right off the bat they'll be looking at full integration of the acquisition of Digital," he said.

In a widely expected move, John Rando, Digital's senior vice president an general manager of the services division, will take on that role at the combined company. Compaq and Tandem service groups will report to Rando, who will have his headquarters in Stow, Mass.

Execs continuing in old roles
Also coming on board from Digital is former chief technology officer Bill Strecker, who will become senior vice president of technology and corporate development at Compaq.

Many of Compaq's senior executives will continue in their old roles under the new structure, including Chief Financial Officer Earl Mason, and PC Products General Manager Mike Winkler. Digital's desktop and portable groups, which have been the subject of much speculation, will report to Winkler.