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Palmer to leave Digital
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June 10, 1998: 3:06 p.m. ET
CEO confirms departure as Compaq unveils new senior management
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NEW YORK (CNNfn) - Digital Equipment Corp. Chairman and Chief Executive Robert Palmer will resign following the completion of its pending $9.6 billion merger with Compaq Computer Corp., both companies announced Wednesday.
His departure entitles the 57-year-old executive to at least $6.45 million cash severance, under an agreement reached with Digital on March 19, 1998.
Separately, Houston-based Compaq unveiled its senior management team to be headed by Compaq's Eckhard Pfeiffer as chairman and chief executive.
The reshuffling of the executive suites came ahead of this week's anticipated completion of the transaction. Digital shareholders are scheduled to vote on the deal at a meeting Thursday, June 11. A news conference is planned for Friday.
Palmer plans to stay with Digital through the end of July, the Maynard, Mass.-based computer maker said. He has led Digital as president and chief executive for the past six years and was elected chairman in May 1995 -- weeks before negotiations to merge the two companies began.
Prior to joining Digital in 1985, Palmer served as executive vice president of semiconductor operations at United Technologies Corp.
In a separate statement, Compaq said the new management team will consist of 12 senior executives who will report to Pfeiffer -- three of whom are Digital employees.
Compaq's Earl Mason will remain as chief financial officer of the combined company. Other senior Compaq managers include Michael Heil, who becomes general manager for sales and marketing, and Enrico Pesatori, who formerly headed Compaq's Tandem Computer unit.
Digital's chief lawyer Tom Siekman will become general counsel of the combined company. Compaq's current general counsel, David Cabello, will stay on to help Siekman integrate the two legal departments.
However, Digital's chief technology officer Bill Strecker will replace Compaq's Bob Stearns, who is leaving the company to pursue other interests.
The head of Digital's extensive service group, John Rando, also will stay with Compaq as the general manager of the combined services group.
As reported, the merger will result in restructuring charges for the combined entity of $1.5 billion to $2 billion, according to proxy materials filed with the Securities and Exchange Commission. About 15,000 jobs are expected to be lost as a result of the merger.
Digital stock (DEC) was down 1/4 at 57-1/2 Wednesday. Compaq shares (CPQ) eased 1/2 to 29-1/4.
-- by staff writer Robert Liu
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