Microsoft CEO Will Not Be Mulally

1/8/14 11:09AM EST

Microsoft CEO Will Not Be Mulally Microsoft CEO Will Not Be Mulally

Image via Pabkov/Shutterstock

After the market closed on Tuesday Ford Motors Company announced that its CEO Alan Mulally would retain his position at the head of the company through 2014. The executive was the favorite to take the reigns at Microsoft Corporation (NASDAQ:MSFT), but that rumor appears to have been overplayed. Microsoft is committed to announcing a new CEO in the opening months of 2014, and the possibility cloud just got a lot less distinct.

Shares in Microsoft fell on the announcement after close of trading on Tuesday. Shareholders have a much less certain view of the next CEO in the wake of Mulally’s rejection, and some of the options will be distasteful to certain groups of shareholders. Microsoft is by no means in trouble. The company’s growth prospects are better than they’ve been in years, but they require a steady hand to guide them.

Mulally Rejects Microsoft

Ford Motor Company (NYSE:F) said that Alan Mulally would stay at the company “at least” through 2014 in a statement after the market closed on Tuesday afternoon. Despite his inexperience in the tech world, analysts singled Mulally out as a great choice for CEO at Microsoft Corporation (NASDAQ:MSFT) because of his ability to run a business, and his record of corporate restructuring.

Many saw Mulally as a temporary CEO who could lead Microsoft while one of its younger less experienced executives learned to run the unwieldy enterprise. With him out of the running, it seems that one of those young executives will have to take on the task by themselves, and that may result in a rocky transition at the company.

Investors may not be a huge fan of Steve Ballmer, but his reign has, at the very least, been marked by stability. The lack of growth in the value of the company over the last ten years is not an ideal price to pay for predictability, particularly in the tech world. The company’s next leader will likely leave investors jumpy for the initial months of their reign.

Microsoft CEO Hunt Continues

Microsoft shares are bound to get more volatile as the company heads toward the announcement of a new CEO, but shareholders have realized that the person at the head of the company’s day to day running is not imperative at Microsoft, an overall strategy, stewarded by the board, is in place, and shareholders are investing in that rather than in a single person.

Microsoft Corporation (NASDAQ:MSFT) will reveal its next CEO at some point in the coming months, and shareholders should pay attention. They shouldn’t, however, put all of their Microsoft hopes in a single personage. The company is stronger than any executive that could be put in charge. Investors are putting money behind that strength.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.


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