Following the announcement last week of chief executive Lester Alberthal’s departure (CI No 3,470), Electronic Data Systems Corp said a compensation package for the outgoing executive will cost it $35m and negatively impact third-quarter results. Alberthal, who retired from the Plano, Texas-based systems integrator for personal reasons, will receive the $35m in the form of converted stock options, a consulting contract, a pension and other benefits. The payout will reduce third-quarter earnings for EDS by about $0.05 per share, when the consensus estimate of analysts surveyed by First Call was for $0.38, down from $0.50 in the year-ago quarter. The company has made it clear that it will be looking outside the company for Alberthal’s replacement, news that cheered investors and sent the company’s stock up 14% on Friday despite the news of the third-quarter charge. EDS, which has been struggling since regaining it independence from General Motors Corp in 1996, has been largely perceived as needing an influx of new blood at the top. Alberthal himself may have been facing some pressure to leave, as the stock options he was to receive were originally based on performance targets, but were then allowed to be converted upon his departure. He has said he will stay on until a suitable replacement is found. In a separate announcement, GM, which still owns 126.5 million EDS shares – or roughly 26% of the stock – said its hourly rate workers pension plan will be selling up to 10 million of the shares in a secondary public offering.
