Microsoft Close To Naming New CEO

1/31/14 10:20AM EST

Microsoft Close To Naming New CEO Microsoft Close To Naming New CEO

Image via Microsoft

Microsoft appears to be on the verge of naming a new chief executive to replace Steve Ballmer. A source close to the matter told Reuters that the Microsoft board is likely to appoint Satya Nadella, the current cloud-computing head.

As part of the move, co-founder Bill Gates may also leave his post as chairman and be replaced by John Thompson, the current lead independent director. Gates would continue to hold a director position.

The CEO announcement would conclude a lengthy five-month search that started in August, when Ballmer announced he would retire within a year.

Nadella’s Long Journey To The Top

Nadella is a 22-year Microsoft veteran who’s worked in a variety of departments. He’s a native of Hyderabad, India, where Microsoft has its largest research center outside of the United States.

After joining the company in 1992, he was quickly promoted to leading roles on the Office and Bing teams. In 2011, he began running the server and tools unit, which is now at the center of Microsoft’s cloud-computing platform.

And when current CEO Steve Ballmer radically restructured the company in July 2013, Nadella became executive vice president in charge of cloud and enterprise.

If Nadella is appointed CEO, he would become the most powerful Indian-born executive in the world.

“He’s a solid choice,” said Sid Parakh, an analyst at the fund firm McAdams Wright Ragen.

But not everyone would be thrilled with the announcement, as some investors pushed for an outside hire. They believe that someone new to Microsoft would make more drastic changes that would be good for shareholders, such as greater dividends and share buybacks, according to Parakh.

Nadella, on the other hand, has little experience with trying to keep investors happy. He’d be tasked in the new role with managing relations with Wall Street investors. In this area of the job, he’d likely require aid from the chairman.

Other Possibilities For Microsoft

The Microsoft board hasn’t finalized Nadella’s offer and nothing’s official yet.

People close to the situation said other candidates for the CEO position included Tony Bates, who is the current executive vice president of business development, former Microsoft executive Stephen Elop, who now leads Microsoft-owned Nokia, and at least one outside candidate.

Ballmer plans to step down as CEO as soon as a replacement is chosen. He was reelected to the board in November, but it’s unclear how long he will keep his seat after retirement.

As for Gates, investors have been urging him for months to leave the chairman position. They believe he is preventing investor-friendly moves and radical changes that could improve the company and its earnings. If he is replaced as chairman, he would stay with the company as a director.

 
 

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