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Bill Gates Met With ‘a Lot’ of Microsoft CEO Candidates

Steve Ballmer, outgoing chief executive officer of Microsoft Corp. Photographer: David Paul Morris/Bloomberg
Steve Ballmer, outgoing chief executive officer of Microsoft Corp. Photographer: David Paul Morris/Bloomberg

Nov. 19 (Bloomberg) -- Microsoft Corp. Chairman Bill Gates said he and other directors have met with “a lot of CEO candidates” to replace Chief Executive Officer Steve Ballmer.

The board convened yesterday to discuss some of the candidates, Gates said at the company’s annual shareholder meeting in Bellevue, Washington, Ballmer’s last before he steps down. Gates said he wouldn’t give a timeline for the decision.

The world’s largest software maker is going through its biggest transition in decades, seeking a new leader while it adopts a new corporate structure focused on devices and services. Microsoft is also buying Nokia Oyj’s handset unit, its largest acquisition by number of employees. The new CEO will have to keep pace with a shift among consumers and businesses to mobile devices and Web-delivered software.

“It’s a complex role to fill,” Gates said. He thanked Ballmer and choking up, said that “we share a commitment to make sure the next CEO is the right person for the right time for the company we both love.”

The company’s directors, including Ballmer, were re-elected by a majority. Shareholder advisory firm Glass Lewis had recommended withholding votes for lead independent director John Thompson, who is also leading the CEO search committee. Glass Lewis expressed concern that Thompson is the CEO of startup Virtual Instruments Inc., which received $2.3 million from Microsoft in fiscal 2013 for software and equipment. Glass Lewis considered this a conflict of interest.

Next Steps

The directors are seeking to narrow the list of CEO candidates to three to five, a person with knowledge of the matter said last week. The board is aiming to have a final choice as soon as next month, three people said.

External choices to replace Ballmer include Ford Motor Co. CEO Alan Mulally and former Nokia CEO Stephen Elop, among others, people with knowledge of the search have said. Because the board perceives the new CEO will have to lead change at Microsoft, the final choice is more likely to be an outsider, said one person with knowledge of the search last week.

Directors are also considering three internal candidates: business development and evangelism chief Tony Bates and Satya Nadella, who oversees the company’s cloud and enterprise business, as well as Chief Operating Officer Kevin Turner, people have said.

Gates didn’t name any candidates.

Ballmer Farewell

The meeting was better attended than in recent years, with extra chairs being added at the back as it got underway.

Ballmer was all smiles, calling the event a “fun meeting,” compared with the teary goodbye message he gave to employees at an internal companywide meeting in September.

One shareholder asked whether Ballmer would take a position as the U.S. Secretary of Information Technology, were such a job created. Ballmer, who has a net worth of $17.7 billion, according to the Bloomberg Billionaires Index, thanked the man for trying to help him find work.

Nokia’s shareholders, also meeting today, cleared the sale of its mobile-phone unit to Microsoft for 5.44 billion euros ($7.4 billion). Once the world’s largest smartphone maker, Nokia agreed to sell the phone division in September, after failing to regain relevance in smartphones following Apple Inc.’s iPhone introduction in 2007.

“Our industry is in a period of incredible innovation, and Microsoft is uniquely positioned to drive and define the next big thing,” Ballmer said. “There is no way for this company to succeed unless it is willing to bet.”

Ballmer pledged growth in the future would be so significant that, looking back, future shareholders will say, “weren’t we a small company back in 2013?”

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

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

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