IBM’s New Chairman Gets an Earful : Computers: Gerstner contends with angry shareholders at the annual meeting. He promises bold steps to try to set things right.

TAMPA, Fla. —  Angry IBM shareholders on Monday unleashed a torrent of pent-up frustration over the company’s decline at new Chairman Louis V. Gerstner Jr., who promised to revive the computer maker but asked for patience.

In just his 18th workday at IBM, Gerstner tried to focus on a broad outline of goals but instead heard impassioned calls for the ouster of the company’s board of directors that were greeted with loud applause.

“We’re glad to have you on board, but let’s go ahead and clean out the rest of the rascals,” a 100-share stockholder told Gerstner during IBM’s annual meeting at the Tampa Convention Center.

About 2,300 shareholders, many of them Florida retirees and longtime company employees, attended an unusually contentious meeting that reflected just how far International Business Machines Corp. has fallen.

The meeting capped a remarkable four months at 79-year-old IBM, whose founder’s credo--”Think”--set a standard of excellence for corporate America. In addition to hiring Gerstner as its first outsider chairman, IBM laid off workers for the first time and lost $285 million from January through March.

IBM has lost more than $7 billion in the last two years, cut a quarter of its work force, or more than 100,000 jobs, since 1987, and lost significant market share amid growing competition. The company has sought to reverse its fortunes through restructurings that have given IBM business units more freedom.

Gerstner, the 51-year-old former RJR Nabisco chairman, took over IBM on April 1 after a closely watched search for a successor to now-maligned former Chairman John F. Akers.

In a frank assessment, Gerstner apologized for the decline and conceded that worker morale was “not very good.” He said slow demand and poor economies had reshaped the computer industry, but he defended IBM’s technological and market power. To shareholders’ approval, Gerstner didn’t try to minimize IBM’s problems.

“IBM has changed, but most people would say not fast enough,” Gerstner said, speaking below a 10-foot-high IBM logo hanging on a curtain in company regulation blue. “This slowness and failure to act quickly is really the root cause of IBM’s problems.”

Gerstner listed four priorities for 1993: completing major staff reductions, defining what businesses IBM will pursue, improving customer relations and decentralizing. He said he hadn’t been working long enough to be more specific.

“I don’t have answers for you yet and we can’t expect quick fixes,” Gerstner said. But he promised: “I can tell you the steps we will take will not be pussyfooting, but bold strides.”

Before the meeting, IBM’s board declared a 54-cents-per-share quarterly dividend. In January, IBM cut the dividend for the first time, from $1.21 per share.

Shares of IBM, once considered the bluest of the blue chips, plunged below $50 in recent days from last summer’s high of $100.375. In 1987, the stock sold for a record $175.875 a share.

On Monday, IBM shares rose 62.5 cents to close at $48.375 on the New York Stock Exchange.

At the 2 1/2-hour meeting, shareholders vented anger over IBM’s fallen stock price, the rapid and drastic nature of its cuts and a pay package under which Gerstner can make tens of millions of dollars in stock options if the company’s stock rebounds.

Their sharpest criticisms were directed at IBM’s board members. The directors were reelected anyway, but 28% of shareholders voted for a proposal to withdraw their generous retirement package, reflecting an unusually high level of dissatisfaction.