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US Report: Digital CEO Palmer steps down

As shareholders prepare to vote on the proposed merger between Compaq and Digital, the latter's chief, Robert Palmer, has announced his departure in July, seeming to ensure a done deal between the two companies.

Compaq outlined the management structure of the new company, which completely subsumes the Tandem division. Palmer had previously announced that he would stay through the completion of the deal and, in a separate statement today, the company stated the details of his departure.

Compaq CEO Eckhard Pfieffer said he valued all Palmer had done "to make this merger work."

Shareholders are scheduled to vote on the merger on Friday. Compaq has also scheduled a press conference to discuss the integration of the companies.

Enrico Pesatori, who had been president of Tandem, will become senior vice president of marketing, and will report to Compaq's 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 $3bn (£1.84bn), 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.

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

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

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.

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.