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Lou Gerstner

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Lou Gerstner

Louis Vincent Gerstner Jr. (born March 1, 1942) is an American businessman, best known for his tenure as chairman and chief executive officer of IBM from April 1993 until 2002, when he retired as CEO in March and chairman in December. He is largely credited with turning IBM's fortunes around. Gerstner is chairman of Gerstner Philanthropies.

Gerstner was formerly CEO of RJR Nabisco, and held senior positions at American Express and McKinsey & Company. He is a graduate of Chaminade High School (1959), Dartmouth College (1963) and holds an MBA from the Harvard Business School

Gerstner was chairman of the Broad Institute of MIT and Harvard and is chairman emeritus of the board of the Gerstner Sloan Kettering Graduate School of Biomedical Sciences.

Gerstner is the author of Who Says Elephants Can't Dance?, about IBM's transformation; and co-author of the book Reinventing Education: Entrepreneurship in America's Public Schools.

Gerstner joined American Express in 1978 and headed its Travel Related Services unit. Under his leadership, the company's market share increased significantly by 1985. He achieved this by finding new uses and users for the card, such as college students, physicians, and women, as well as persuading corporations to adopt the card as a more effective way of tracking business expenses. He also created exclusive versions of the card for higher-end clients, such as the Gold Card and the Platinum Card.

As sales and profits rebounded, Gerstner was promoted to chairman and chief executive officer of AmEx's Travel Related Services in 1982, and president of the parent company in 1985. Although he claimed the position at the age of 43, Gerstner dismissed the speculation that his success was the product of being a workaholic. Gerstner told Leslie Wayne, "I hear that and I can't accept that. A workaholic can't take vacations and I take four weeks a year."

As chairman and chief executive officer of the Travel Related Services division, Gerstner spearheaded its successful "membership has its privileges" promotion. Not only was the division continually the most profitable in the company, but it also led the entire financial services industry. Despite these successes, Gerstner hit a ceiling at American Express, as chief executive James D. Robinson III was not expected to retire for another 12 years. During Gerstner's 11-year tenure at American Express, membership had increased from 8.6 million to 30.7 million. He left AmEx in 1989 to succeed Ross Johnson as chairman and chief executive officer of RJR Nabisco following its $25 billion leveraged buyout by Kohlberg Kravis Roberts.

Gerstner was hired as chairman and CEO of IBM in April 1993. Under pressure from investors, his predecessor John Akers was forced to resign. The board initially looked within the computer industry for his successor. However Apple's John Sculley, Motorola chairman George Fisher, and Bill Gates of Microsoft were not interested (other rumored candidates included Eckhard Pfeiffer of Compaq and Scott McNealy of Sun Microsystems). IBM then turned to Gerstner, an outsider with a record that suggested success whose older brother Richard had run the company's PC division until retiring due to health issues four years earlier. Gerstner was the first IBM CEO who was hired from outside the company.

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