Microsoft Board Said to Work on Hiring New CEO This Year

Microsoft Corp. (MSFT)’s board is working toward having the successor to Chief Executive Officer Steve Ballmer in place by the end of this year and is winnowing a list of candidates, said people with knowledge of the discussions.

The board is narrowing its choices amid preliminary interviews, said the people, who asked not to be identified because the talks are private. Some candidates have declined to be considered, including EBay Inc. (EBAY) CEO John Donahoe, said two people. The board has also solicited advice from Silicon Valley veterans such as Charles Giancarlo, a former Cisco Systems Inc. executive and now a managing director at private-equity firm Silver Lake, said other people with knowledge of the matter.

Board members have already spoken with candidates such as Ford Motor Co. (F) CEO Alan Mulally; former Nokia Oyj (NOK1V) CEO Stephen Elop, who will join Microsoft when its $7.2 billion acquisition of Nokia’s handset unit closes; former Microsoft No. 3 executive Paul Maritz, who is now CEO of cloud venture Pivotal; and Microsoft business development and evangelism chief Tony Bates, said the people.

The precise timing of a CEO announcement will depend on negotiations over matters like compensation and, in the case of an external candidate, departure from their current company, said the people.

Photographer: David Paul Morris/Bloomberg

Steve Ballmer, chief executive officer of Microsoft Corp., who has led the Redmond, Washington-based company since 2000, said in August that he plans to retire within a year. Close

Steve Ballmer, chief executive officer of Microsoft Corp., who has led the Redmond,... Read More

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Photographer: David Paul Morris/Bloomberg

Steve Ballmer, chief executive officer of Microsoft Corp., who has led the Redmond, Washington-based company since 2000, said in August that he plans to retire within a year.

Even if that delays an appointment until next year, the current time frame for the CEO search underscores the urgency for a new leader at the world’s largest software maker. With rivals like Apple Inc. (AAPL) and Google Inc. (GOOG) pulling away in key markets like mobile and tablet computing, Ballmer is overhauling Microsoft’s strategy and culture to focus on devices and services. Any new CEO must manage that transition, as well as integrate Nokia’s phone business and run the company.

Gates, Ballmer

Microsoft has only had two CEOs -- co-founder Bill Gates and Ballmer -- in its 38-year history. Ballmer, who has led the Redmond, Washington-based company since 2000, said in August that he plans to retire within a year.

Frank Shaw, a spokesman for Microsoft, declined to comment on specific candidates or to make Bates available for comment. Microsoft directors have retained executive-search firm Heidrick & Struggles to look at internal and external candidates.

Jennifer Hakes, a spokeswoman for EBay, said Donahoe wasn’t available for comment. Susan Sheehan, a spokeswoman for Nokia, declined to comment, as did David Oro, a spokesman for Pivotal. Gordon Goldstein, a spokesman for Silver Lake, didn’t immediately return a call for comment.

“Alan continues to focus on executing the One Ford plan, and we don’t engage in speculation,” Jay Cooney, a Ford spokesman, said by telephone of Mulally.

Ford directors gathering this week in Dearborn, Michigan, are likely to be discussing Mulally’s future plans, a person with knowledge of the No. 2 U.S. automaker board’s thinking has said. Ford Executive Chairman Bill Ford this month touted the abilities of the company’s next generation of executives, while emphasizing the plan for Mulally to remain CEO through 2014.

Microsoft shares rose 1 percent to $33.41 as of 9:33 a.m. in New York.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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