IBM Corp’s top management faces the biggest threat yet to its strategy and its continued incumbency atop the beached whale. Its long-suffering shareholders are to get the opportunity to succeed where the government failed in 1982, and break the company up. A ginger group, the Washington-based United Shareholders Association plans this month to start soliciting shareholder proxies for a motion that if approved would force IBM’s non-executive directors to call in a firm of investment bankers to advise on a plan to maximise shareholder value by spinning off or selling one or more units of the company. According to the Wall Street Journal, IBM officials have not yet studied the resolution, and declined to comment on it, although they are expected to fight to ensure that it is not put before shareholders at the annual meeting. IBM is believed to be working on a much less radical plan to copy General Motors Corp and issue different classes of common shares, each standing pari passu all the others in the event of a break-up, but each paying dividends that were tied to the performance of a single IBM unit, be it AdStar, Application Business Systems or Pennant Systems. But the degree of frustration over IBM’s continued non-performance may make it too late for such half measures, leaving break-up of IBM into more manageable units the only option.
