The Schwartz Report

Blog archive

Are Ballmer and Gates Slowing the Microsoft CEO Search?

One of the biggest stories in Redmond last year was Microsoft CEO Steve Ballmer's unexpected announcement of his upcoming retirement. Whoever succeeds him will undoubtedly define the company's agenda in 2014 and beyond. It remains anyone's guess who Microsoft's board will name as the company's third CEO but it appears the only two to sit at the helm -- Ballmer and Founder Bill Gates -- are the reasons why the search is taking so long.

Gates of course is chairman of the board, while Ballmer is also a director and it remains unclear whether either or both will retain their seats. It's reasonable to presume they don't want to give up their current slots. That may be a key reason why many ideal candidates are uninterested, according to a Wall Street Journal piece over the weekend. The publication noted that no new CEO wants their two predecessors in a position to second guess every move they make.

Citing data from executive compensation firm Equilar, The Journal reported only eight companies in the S&P 500 Index have two former CEOs on their boards. That would certainly explain why a candidate like VMware CEO Pat Gellsinger or his predecessor Paul Maritz, once in the inner circle of Gates and Ballmer, might be unwilling to consider the job. Their presence on the board would certainly make life difficult for others such as Stephen Elop or Satya Nadella.

The counter argument for letting them remain on the board is that both Gates and Ballmer are key parts of Microsoft's DNA. Some stakeholders in Microsoft's future would see that as an asset, while others would consider it a liability.

There are several possible scenarios. They both could retain their seats (with Gates remaining chairman), Gates could step down as chairman but remain a board director or one or both of them could leave the board. Which scenario do you think would give the next Microsoft CEO the best chance of improving the company's fortunes?

Posted by Jeffrey Schwartz on 01/06/2014 at 12:06 PM


comments powered by Disqus

Subscribe on YouTube