Les Alberthal Biography: EDS Independence and Its Challenges

On June 7, 1996, Electronic Data Systems became independent of General Motors after more than a decade as its subsidiary. Les Alberthal, the chief executive who led EDS through the split, had begun his career there as a trainee.

He joined EDS in 1968, when the company founded by H. Ross Perot was still small. Over the following decades, Alberthal rose through its operating divisions, took charge after Perot left and helped change the way a much larger business was managed.

Independence and rising sales, however, did not spare EDS from customer complaints, weaker earnings growth and shareholder pressure. Those problems shadowed Alberthal’s final years in charge before he retired in 1998 and returned to cattle ranching in Texas.

A Quick Look at the Life of Les Alberthal

From a Texas Upbringing to a Career at EDS

Les Alberthal was born on February 27, 1944, in Corpus Christi, Texas, and grew up in Comfort. His parents were Ethel and Lester M. Alberthal Sr.

While working a summer job in La Crosse, Wisconsin, he met Karen Bakkum. They married in 1966. Two years later, Alberthal graduated from the University of Texas at Austin with a bachelor’s degree in business administration.

In 1968, he joined Electronic Data Systems in Dallas as a systems engineer trainee. H. Ross Perot had founded EDS in 1962. When Alberthal arrived, EDS had approximately 125 employees and less than $5 million in annual revenue.

Learning the Business Before Leading It

Alberthal advanced through EDS’s operating divisions. In 1974, he took charge of the Health Care Division; he later became senior vice president responsible for the Insurance Group. These positions preceded his broader responsibility for business outside GM.

General Motors purchased EDS in 1984 for roughly $2.5 billion. As EDS became a GM subsidiary, Alberthal took responsibility for its non-GM North American operating groups. The assignment gave him oversight of business beyond the automaker’s account before he moved into the top executive ranks.

Taking Charge After Ross Perot’s Departure

EDS named Alberthal president in April 1986, succeeding Morton H. Meyerson. His promotion came during a period of conflict between General Motors and EDS founder H. Ross Perot.

GM bought out Perot’s interests later that year, and Perot departed the EDS leadership in December 1986. Alberthal became chief executive during this transition. He took over a company strongly associated with its founder’s public identity and management traditions, but now operating without him at the top.

Alberthal did not become chairman at the same time he became CEO. The chairmanship remained vacant after Perot left until June 1989, when Alberthal took on that role as well.

The Perot Systems Dispute

The separation from Perot did not end the relationship between the founder and his former company. Perot established Perot Systems in June 1988, and several former senior EDS employees joined the new venture. EDS became involved in litigation over competitive activity, employee recruitment and the contractual restrictions associated with Perot’s earlier departure.

Alberthal spoke for EDS management during the dispute. He said the company had been reluctant to take legal action against its founder but believed it needed to protect its contractual rights. Perot, for his part, challenged negative characterizations of his intentions.

In 1988, a Fairfax County judge allowed Perot Systems to compete, while retaining contractual restrictions on profits from certain work before December 1, 1989. The court left some contractual limits in place rather than prohibiting Perot Systems from competing entirely. EDS’s break with its founder had become a legal as well as a leadership matter.

Building a Different Management Structure

As EDS expanded, its management changed as well. Around 1990, the company reorganized into roughly three dozen strategic business units, giving industry-focused operating teams more authority. A Leadership Council was intended to free senior managers to devote greater attention to company strategy.

EDS sought management advice from McKinsey & Co. and became more outward-facing in its dealings with customers and the public. The reorganization gave managers across the business greater authority, though elements of the Perot-era culture remained.

By 1991, less than half of EDS’s business came from GM, although the automaker remained its owner and an important customer. Contemporary reporting put EDS’s workforce near 71,000 and annual sales around $7 billion by 1992. The size and diversity of its operations made the question of how to manage the company increasingly consequential.

In a 1993 interview, Alberthal explained the difficulty of building a corporate identity distinct from Perot’s. Of EDS’s earlier public image, he said, “We didn’t have a reputation at all.” The remark captured a problem that persisted even as EDS grew into a major services provider.

International Growth and a Merger That Did Not Happen

EDS’s expanding reach included European acquisitions and substantial outsourcing contracts. It acquired the UK technology-services company SD-Scicon in 1991.

Alberthal also explored how computer services might combine with telecommunications. In May 1994, EDS and Sprint entered discussions about a possible merger. The proposed combination would have required an EDS separation from GM and reflected the companies’ interest in the overlap between networks and technology services.

EDS and Sprint ended the negotiations in June 1994 after failing to agree on financial terms. The proposed merger never took place.

A ten-year technology-services agreement with the United Kingdom’s Inland Revenue began in July 1994, providing another example of EDS’s growing international business.

In September 1995, EDS expanded into management consulting by acquiring A.T. Kearney. The completed transaction was reported at $300 million in cash and notes. Bringing consulting and technology services closer together broadened the range of work EDS could offer customers.

EDS Regains Its Independence From General Motors

Although EDS had developed extensive business beyond GM, the automaker’s ownership still shaped its strategic options. On August 7, 1995, GM announced a plan to separate EDS through a share exchange. Alberthal argued publicly that operating independently would create more flexibility to enter markets, build alliances and develop services.

The plan moved through corporate approvals during 1996. In April, GM’s board approved a proposed one-for-one stock exchange accompanied by a $500 million payment from EDS to GM. Shareholder approval was still required, and the companies negotiated commercial arrangements to keep EDS a major supplier to GM.

The separation took effect on June 7, 1996, making EDS an independent, publicly held company. Contemporary reporting valued the business at more than $25 billion. That was EDS’s market value, not Alberthal’s personal wealth.

Independence coincided with a difficult cost-reduction program. EDS announced an anticipated restructuring charge of $500 million to $750 million, voluntary retirement offers for up to 2,800 workers and the possibility of as many as 2,200 additional layoffs. These were proposed figures rather than confirmed final job-loss totals. Alberthal said the restructuring was intended to improve competitiveness and was not caused by the split-off.

When Revenue Growth Was No Longer Enough

EDS’s annual revenue had been roughly $4 billion to $4.4 billion when Alberthal became CEO in 1986. By 1997, it reached about $15.2 billion. Its sales growth contrasted with a more troubled operating picture.

In an internal message reported in June 1997, Alberthal acknowledged customer dissatisfaction, weaker employee morale, rising turnover, slower earnings growth and disappointed shareholders. “We have not done as good a job with our clients as we should have,” he wrote. The same reporting described plans for staffing reductions of around 9,000 positions, not confirmation that every planned reduction had occurred.

Investor criticism became more public in May 1998. CalPERS, an investor, sought shareholder support for an independent EDS board chairman. Its proposal would have separated the chairmanship from Alberthal’s chief executive role; it was not, in itself, a demand to remove him as CEO. The campaign unfolded amid missed earnings expectations and share-price concerns.

Revenue had more than tripled during Alberthal’s tenure, but EDS was now facing public scrutiny of its service, earnings and corporate governance.

Retirement, Succession and the Exit Package

On August 7, 1998, EDS announced that Alberthal would retire, remaining chairman and chief executive until a successor was chosen. He called it a suitable time for a leadership transition. Contemporary reporting also cited personal considerations, while analysts and other observers questioned the influence of EDS’s difficult performance and shareholder pressure.

The announcement did not establish whether EDS directors privately pressed him to leave. The business problems and shareholder criticism were public; any decisive behind-the-scenes role they played in his retirement remains uncertain.

In December 1998, EDS appointed Richard H. Brown as its next chairman and chief executive. Alberthal left the senior leadership after approximately 30 years at the company and roughly 12 as CEO.

Alberthal’s exit arrangements became a further source of criticism. Reporting later estimated their cost to EDS at about $35 million, including payments, pension provisions and stock options. The amount was not a single cash payment, and the coverage discussed noncompetition provisions without establishing any personal legal wrongdoing.

Returning to Texas Ranching

After leaving EDS, Alberthal returned to Buzzard Hollow Ranch in Granbury, Texas, where he raised registered Simmental cattle. The move gave his later life a very different professional setting from the international computer-services business he had led.

In 2019, a Texas cattle-breeding operation reported acquiring the Buzzard Hollow Ranch herd. The buyer credited the ranch’s earlier cattle-breeding program.

Recognition from his executive years included the BYU Marriott School’s 1996 International Executive of the Year award and the World Affairs Council of Dallas/Fort Worth’s 1997 H. Neil Mallon Award. A 2002 Southern Methodist University record also listed him as a university trustee.

Alberthal died on August 25, 2026, at age 82. His family’s obituary identified his wife, Karen, and their children Kari, Kelly and Brian among his survivors.

A Legacy of Expansion and Difficult Trade-Offs

From a trainee at a small Perot-led company, Alberthal became the chief executive of a much larger international services business. Under his leadership, EDS decentralized management, expanded beyond its original markets and gained independence from General Motors.

That growth was accompanied by difficult episodes: a legal contest involving Perot, failed merger talks with Sprint, restructuring, service problems and shareholder criticism. The final years of Alberthal’s tenure demonstrated that expanding revenue and gaining independence did not settle questions about performance.

EDS continued under other executives until Hewlett-Packard acquired it in 2008. Alberthal’s place in its history rests on the transition from a founder-centered company and a GM subsidiary to an independent business—and on the operational and investor pressures that accompanied that change.

Timeline

These milestones trace Alberthal’s life and the major changes at EDS during his career.

1944

February 27: Lester M. Alberthal Jr. is born in Corpus Christi, Texas.

1966

He marries Karen Bakkum.

1968

Alberthal graduates from the University of Texas at Austin and joins EDS as a systems engineer trainee.

1974

He becomes head of EDS’s Health Care Division.

1984

General Motors purchases EDS; Alberthal subsequently oversees its non-GM North American operating groups.

1986

April: Alberthal becomes EDS president. Following Perot’s departure in December, he serves as chief executive.

1988–1989

Perot establishes Perot Systems in 1988, and a legal dispute develops with EDS. In June 1989, Alberthal becomes EDS chairman.

Around 1990

EDS reorganizes into industry-focused business units and establishes a Leadership Council.

1994

EDS and Sprint pursue, then abandon, merger talks. A major EDS technology-services arrangement with the UK’s Inland Revenue begins.

1995

GM announces its proposed separation of EDS, and EDS completes the purchase of A.T. Kearney.

1996

June 7: EDS completes its separation from GM. Alberthal is recognized as BYU Marriott School’s International Executive of the Year.

1997

Alberthal acknowledges operational problems in an internal message and receives the H. Neil Mallon Award.

1998

CalPERS presses for an independent EDS chairman; Alberthal announces retirement in August, and Richard H. Brown is named successor in December.

2002

Alberthal is listed as a Southern Methodist University trustee.

2008

Hewlett-Packard acquires EDS under later leadership.

2019

A Texas cattle-breeding business reports acquiring the Buzzard Hollow Ranch herd.

2026

August 25: Alberthal dies at age 82.

FAQs

Did Les Alberthal found EDS?

No. H. Ross Perot founded Electronic Data Systems in 1962. Alberthal joined EDS as a systems engineer trainee in 1968 and became chief executive after Perot’s departure from its leadership in 1986.

When did Les Alberthal become CEO and chairman of EDS?

He became EDS president in April 1986 and chief executive following Perot’s departure that December. Alberthal was appointed chairman in June 1989 and remained chairman and CEO until the 1998 leadership transition.

Did EDS merge with Sprint while Alberthal led the company?

No. EDS and Sprint discussed a possible merger in 1994, but the negotiations ended that June without an agreement on financial terms. The companies did not complete the proposed combination.

When did EDS become independent of General Motors?

EDS’s separation from General Motors became effective June 7, 1996, while Les Alberthal was CEO. GM had announced the plan in 1995 and continued to have important commercial ties with EDS after the split.

Why did Les Alberthal leave EDS in 1998?

EDS announced Alberthal’s retirement in August 1998. The retirement followed acknowledged business problems and a shareholder campaign for an independent chairman. Any role played by private board pressure in his decision has not been conclusively established.

When did Les Alberthal die?

Lester M. “Les” Alberthal Jr. died on August 25, 2026, aged 82. His family’s obituary was published in September 2026; earlier executive profiles may not reflect his death.

Interviews

Les Alberthal on EDS’s Corporate Identity and Future

In David Bowen’s 1993 interview for The Independent, Alberthal discusses the difficulty of establishing an EDS identity beyond Ross Perot and the company’s expanding international outlook. The conversation also touches on corporate presentation and the growing gap between technological capability and how organizations use it. It offers a firsthand view of his thinking during the middle years of his leadership.

Read the interview

Life After Perot: Voices From a Changing EDS

John Burgess’s 1992 Washington Post feature draws on original interviews and reporting to examine EDS after its founder left leadership. It explores shifts in management authority, the company’s culture and its growing scale. Readers interested in the people and organizational changes behind the transition will find useful contemporaneous perspectives.

Read the interview-based feature

Sources

• Wiley Funeral Home / Legacy: Family obituary for Lester M. Alberthal Jr..
• Harvard Business School: Lester M. Alberthal Jr., Great American Business Leaders.
• Brigham Young University Marriott School: Marriott School Honors Alberthal (1997).
• Los Angeles Times / Bloomberg News: Alberthal Named EDS President (1986); Alberthal Named EDS Chairman (1989); Computer Services for Hire (1992); EDS–Sprint Merger Talks (1994); Sprint–EDS Merger Talks End (1994); EDS Acquires A.T. Kearney (1995); GM Board Approves EDS Split Proposal (1996); EDS Becomes Independent (1996); CalPERS Proposal for EDS Chairman (1998).
• The Washington Post: Perot Can Compete With EDS (1988); Life After Perot (1992); GM Plans to Spin Off EDS (1995); Giving the Golden Handshake (2000).
• The Christian Science Monitor: EDS Restructuring and Expansion (1991).
• The Independent: Corporate Image: Giant That Rose Without Trace (1993); We Are Failing Clients, Says EDS Chairman (1997).
• Kearney: Our Story: 1995 EDS Acquisition.
• Delaware Court of Chancery: Solomon v. Armstrong: EDS Split-Off History.
• KMWorld: EDS CEO to Call It Quits (1998).
• UK Parliament / Hansard: EDS Ltd.: Inland Revenue Services Contract (1996).
• World Affairs Council of Dallas/Fort Worth: H. Neil Mallon Award Recipients.
• Southern Methodist University: 2002 Board of Trustees Record.
• Simmentals of Texas: Buzzard Hollow Ranch Herd History.
• Hewlett-Packard / U.S. Securities and Exchange Commission: HP Acquisition of EDS, Form 8-K (2008).