Palm chief executive Carl Yankowski has resigned, handing the reins of the troubled handheld maker to chairman Eric Benhamou.
The move follows a brutal year for the company in which it went from being profitable and flush with cash to having a glut of its products and significant losses.
Benhamou will serve as CEO until a permanent replacement is found. A search is already underway, Palm said.
"With Palm's transition into two individual businesses almost complete, my role has changed, and it no longer matches my aspirations," Yankowski said in a statement.
Yankowski did not announce his future plans.
Palm shares were up slightly following the announcement to US$2.30 in after-hours trading on the Island ECN, after closing regular trading down 3 cents, or 1.3 percent, to US$2.27, well off their 52-week high of US$62.75.
Despite its problems earlier in the year, Palm said Thursday that it is on track to meet its financial estimates for the quarter.
"While the economic slowdown persists, and consumer confidence has fallen following the September 11 terrorist attacks, we are encouraged that sell-through has rebounded to levels above that of the summer months," Benhamou said in the statement.
Palm said Benhamou will chair an Executive Council that will help lead the company until a new CEO is named. The council is made up of David Nagel, CEO of Palm's soon to be spun off operating system subsidiary; Palm chief operating officer Todd Bradley and CFO Judy Bruner. Palm said it is in the final stages of separating the OS business and will begin reporting revenue and operating results separately for the two businesses beginning with the quarter that ends March 1, 2002.
The move is positive for the company, said William Crawford, an analyst at US Bancorp Piper Jaffray. "The buck stops with the CEO, and Palm management has clearly not executed," Crawford said.