Ibm Stays Mum,But No One Else Does

CEO wannabes and don't-wannabes feed a media frenzy

Only a company so big, so powerful, and so troubled could have its search for a chief executive turned into such a circus. Only IBM could inspire the public scrutiny and media frenzy that have mushroomed in the eight weeks since it said it would replace John F. Akers.

On Mar. 15, it was Motorola CEO George M.C. Fisher's turn to emphatically deny his interest in IBM's top job. His statement touched off new torrents of speculation, since it followed by days similar proclamations from AlliedSignal CEO Lawrence A. Bossidy, Apple Computer's John Sculley, and former Hewlett-Packard boss John A. Young.

Where do all the withdrawals leave IBM? In a bit of a conundrum. "The fact that you have people from lesser companies saying `no thanks' is horrible," says Richard K. Ives of headhunters Wilkinson & Ives. "It's like shopping for a used car. Yet this is still the premier technology company in the world."

TOUGH NUT. IBM's quest wasn't supposed to be quite so chaotic. When Akers announced on Jan. 25 that he would step down, IBM quickly formed a search committee of seven closemouthed outside directors, led by retired Johnson & Johnson Chairman James E. Burke. But they faced a dilemma: Only the very best executives could handle the huge job of saving what many still consider a national treasure. But what accomplished CEO would want to leave a steady job to take on such a high-risk proposition? "I can't imagine that anybody who's successful enough and bright enough could get paid enough to do the job," says Scott McNealy, CEO of IBM rival Sun Microsystems Inc.

Enter the press. Almost daily, speculation has regularly lifted and deflated the reputed candidacies of a dozen celebrity CEOs. Some have played the game adroitly, keeping mum and letting speculation build. Paul G. Stern, who, two days after Akers announced he was stepping down, resigned as Northern Telecom's CEO, but not as its chairman, is regularly suggested as a leading candidate. But who knows? Northern Telecom's own PR department, headed by former White House spokesman Larry M. Speakes, says it asked Stern in early March if he wished to publicly deny his interest to avoid embarrassment if he is not selected. Stern pointedly refused.

For others, the media glare proved all too distracting. Sculley says he told his board early on he was not interested in the IBM job. Still, he was ceaselessly queried by reporters, investors, and employees about the possibility. "Everywhere I went, people kept coming up to me and saying: `I hope you're going to take the IBM job.' It was getting unbearable."

Sculley's self-removal from the race only heightened speculation about the rest of the field. One person close to the search says "many" big names have been approached about the job and said no, but the people who know for sure aren't talking. Burke declines to return reporters' calls, and the IBM spokesman handling such requests notes only that the board's self-imposed 90-day deadline will not expire until Apr. 30.

AXMAN COMETH? That isn't to say one can't make an informed guess about who's on the A-list. Some IBMers believe Stern is one. He's well known as a tough and demanding manager who does not flinch from firing people or ordering brutal reorganizations. "I think that if Stern got the job, it would add 15 points to IBM's stock," says Michel Guite, an analyst at Dillon, Read & Co.

Then there's Mort Meyerson, the iconoclastic chairman of Perot Systems Corp. He still tops many outsiders' short lists, even though he told Perot managers in February that he intends to stay with the company "for the foreseeable future," according to Perot co-founder DeSoto Jordan.

Louis V. Gerstner Jr., chairman of RJR Nabisco Holdings Corp. and another media-elected top candidate, has remained intriguingly silent. Although a turnaround specialist, he's a long shot, having no computer industry experience. And he holds options for more than 5 million RJR shares, a tough jackpot to walk away from.

So when will the circus end? IBM's board will gather on Mar. 29, and the annual meeting is set for Apr. 26 in Tampa. The one sure bet is that a decision will come sometime before then. Or so say IBM-watchers, who these days include just about everyone.

Catherine Arnst in New York, with William C. Symonds in Toronto, Kathy Rebello in San Francisco, and Bureau Reports