IBM’s Rometty Could Be Next Female CEO to Leave

By Douglas A. McIntyre Updated Jan 11, 7:48PM EST · Published Aug 7, 6:35AM EDT

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IBM’s Rometty Could Be Next Female CEO to Leave — © Ethan Miller / Getty Images

With the announced departure of PepsiCo Inc. (NYSE: PEP) CEO Indra Nooyi, only 23 Fortune 500 companies will be led by a woman. The next female CEO to exit may well be International Business Machines Corp.’s (NYSE: IBM) Virginia Rometty, who is more likely to be pushed out by her board.

Rometty’s tenure has been at risk for some time. Weak results at IBM and its slow pace to enter cloud computing have pulled its shares down 21% in the past five years, while the S&P 500 is up 72% in that time.

IBM announced another challenging quarter recently. Revenue was up 4% to $20 billion. In the second quarter, earnings rose only from $2.49 per share to $2.63. The results pale in comparison to more successful rivals, particularly in the cloud space, Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT). One measure tells almost the entire story. While Amazon’s market cap is $901 billion and Microsoft’s is $831 billion, at IBM it is $133 billion.

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Rometty continues to plug along with a similar message quarter after quarter. In her comments for the most recent quarter she said:

We delivered strong revenue and profit growth in the quarter, underscoring IBM’s progress and momentum in the emerging, high-value segments of the IT industry. More clients are engaging IBM on their journey to the cloud, and deploying IBM Cloud, Watson AI, analytics, blockchain and security solutions. This demonstrates IBM’s unique leadership in providing innovative technology coupled with deep industry expertise, trust and security.

Investors did not buy it. IBM’s shares are down another 4% this year. Microsoft, another Dow component, has posted a stock price increase of over 24% for the same period.

Most analysis of female CEO departures comes from a look at age and retirement dates. In Rometty’s case, neither matter. Performance will drive her departure.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.