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August 23, 2013

Steve Ballmer to Hang Up Hat as Microsoft CEO

57-Year-Old Announces Exit, Apprently of His Own Accord

Steve Ballmer may be retiring earlier than he anticipated, but Microsoft’s CEO will leave his office more than half a billion dollars richer.

News of Ballmer’s upcoming retirement sent the company’s stock soaring today which may not do much for the CEO’s self-esteem, but will certainly help to line his pockets.

Ballmer owns roughly 333 million shares and, with stocks up more than five percent, he is more than $560 million richer since the announcement, according to a USA Today report.

Microsoft announced Ballmer’s uncoerced retirement this morning, saying he will exit the company after his successor is chosen within the next 12 months. In the meantime, Ballmer will continue as CEO.

“There is never a perfect time for this type of transition, but now is the right time,” the 57-year-old said in the company press release announcing his retirement. “We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”

Ballmer, in an internal e-mail sent to Microsoft employees, described his decision to leave as “emotional” and “difficult.”

Steve Ballmer

Steve Ballmer

“I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matters to me most,” he wrote.

“I am proud of what we have achieved. We have grown from $7.5 million to nearly $78 billion since I joined Microsoft, and we have grown from employing just over 30 people to almost 100,000. I feel good about playing a role in that success and having committed 100 percent emotionally all the way. We have more than 1 billion users and earn a great profit for our shareholders. We have delivered more profit and cash return to shareholders than virtually any other company in history.”

The board of directors has appointed a special committee, chaired by board director John Thompson, to head up the process of finding a new CEO. The committee also includes chairman of the board and company co-founder Bill Gates.

“The board is committed to the effective transformation of Microsoft to a successful devices and services company,” Thompson said. “As this work continues, we are focused on selecting a new CEO to work with the company’s senior leadership team to chart the company’s course and execute on it in a highly competitive industry.”

Ballmer, who joined Microsoft in 1980, last month introduced a major shakeup at the company — one that put the firm’s focus on all divisions working together toward a common goal rather than separately as has been the norm for years.

John Thompson

John Thompson

Ballmer disbanded Microsoft’s eight product divisions to make way for four new, broader divisions that will focus on teamwork to propel the company back to its former glory at the top of the technological heap — a position now belonging to firms such as Google, Apple and Samsung.

Along with the division changes come changes in leadership. Ballmer re-organized the responsibilities of the majority of his senior executives.

It was a shakeup that was sorely needed, and one that may not be fully complete until Ballmer’s successor is named.

Investors and analysts alike have been calling for Ballmer’s dismissal due to the company’s failure under his watch to capitalize on both the mobile movement and Internet search.

Founder and principal analyst Jack E. Gold of J. Gold Associates said Microsoft needs a new strategy and a new focus — one it is not getting from Ballmer.

“It’s clearly time for new leadership and vision at MSFT,” Gold said, adding that Ballmer “has lost touch with his marketplace and customer base.”

“His insistence that MSFT was on the right course even though customers were complaining was catastrophic. The refusal to add back the start button on Win8 when virtually the entire marketplace was asking for it dramatically decreased the desirably of the OS and even accelerated the downswing in PC sales. This was ultimately an arrogant position. The near total failure in mobile devices (with minimal market share) when that’s where the market was going, was another disaster. But more importantly than all of that, users and enterprises were focused on the fact that they didn’t believe MSFT had a long-term vision that would lead them into the next decade.”

Without a dynamic, forward-thinking leader, Microsoft will continue its slow decline, Gold said.

“Many people still maintain a good will feeling towards MSFT and want it to succeed,” he said. “Can MSFT tap into this with new leadership and once again become an innovative leader in the market, or at the very least, give people what they want and are willing to put there money down to obtain? That’s the ultimate question the next leader of MSFT will have to answer, and demonstrate a willingness to address.”