Qualcomm Names Operating Chief Steve Mollenkopf as CEO
Qualcomm (QCOM) Inc., the world’s largest maker of chips for mobile phones, promoted Steve Mollenkopf to chief executive officer, elevating an official who was said to be a candidate for the top job at Microsoft Corp.
Mollenkopf, 44, who had previously been chief operating officer, will become CEO on March 4, the San Diego-based company said today in a statement. He will join the board and continue to serve as Qualcomm’s president. Paul Jacobs, 51, the current CEO, will become executive chairman.
The move marks the first time that the nearly three-decade-old chipmaker has picked a leader from outside the founding Jacobs family. Mollenkopf’s promotion rules him out as a replacement for Steve Ballmer as CEO at Microsoft, the world’s largest software maker. That company’s board had been considering the Qualcomm executive as a candidate, people familiar with the matter said this week.
“This is the first time a Jacobs won’t be CEO at Qualcomm -- that says a lot about Mollenkopf’s merits,” said Roger Entner, an analyst at Recon Analytics in Dedham, Massachusetts. “He helped transform Qualcomm from simply a wireless chip supplier to a leading developer of processors for mobile devices.”
Qualcomm had been planning the management change for “a fairly long period of time,” and accelerated the plan, Jacobs said in a phone interview, without elaborating on the timing of the decision. Bloomberg News yesterday reported that Mollenkopf was under consideration for the Microsoft CEO job.
“Our executives are very talented, very sought after,” said Jacobs. “By doing this, it ensures the continuity of the management team. I really wanted to make sure that our management team stuck around and focused on the job ahead which is a huge opportunity for Qualcomm.”
He declined to comment on Microsoft. Jacobs, the son of Qualcomm co-founder Irwin Jacobs, said he will focus on pushing future growth projects at the company, initiatives that he hadn’t been able to devote time to while CEO.
“It’s a smooth transition. I’m staying around,” he said. “Steve’s the guy making the decisions.”
After joining Qualcomm in 1994 as an engineer, Mollenkopf rose through the ranks to become head of the chip business, QCT, in 2008. While leading the group, he bought chipmaker Atheros for $3.1 billion in 2011, making Qualcomm’s largest acquisition. Mollenkopf became president and operating chief in November of that year.
Mollenkopf’s compensation last year totaled $14.2 million, according to data compiled by Bloomberg. He has a bachelor of science degree in electrical engineering from Virginia Tech and a master of science degree in electrical engineering from the University of Michigan.
“I’ve had a big piece of what’s going on,” Mollenkopf said. “The way we’re headed is the right way and I’m happy to have the ability to contribute at a higher level.”
Qualcomm shares fell less than 1 percent to $72.58 at the close in New York. The shares are up 17 percent this year.
“Mollenkopf had effectively been running the day-to-day operations of the company, so we don’t expect daily operations to change materially,” Rod Hall, an analyst at JPMorgan Chase & Co. in San Francisco, said in a note.
The company gets revenue from sales of smartphone chips and collects license fees from wireless providers for the shipment of most Internet-capable handsets.
Qualcomm’s leadership in cellular baseband chips has given it a dominant position in fourth-generation devices, which receive high-speed data. It has averaged a 31 percent annual sales gain in its past three fiscal years. The chipmaker, trying to bolster its position, introduced a new Snapdragon processor last month that can handle the highest quality video and higher resolution photos.
Still, Qualcomm’s growth prospects are threatened in China. The country’s National Development and Reform Commission began an investigation last month related to an anti-monopoly law.
Irwin Jacobs started Qualcomm in 1985 and served as its first CEO. Paul joined the company full-time in 1990 as an engineer and later led the handset and chip division before taking the helm in 2005. His father served as chairman until 2009.
Qualcomm has flourished under Paul. Sales increased to $24.9 billion in fiscal 2013, from $5.7 billion in 2005. Net income has tripled and the company’s total market value surged to $123 billion, overtaking Intel Corp. as the largest publicly traded U.S. chipmaker.
During that time, other Qualcomm executives were stymied in their aspirations of becoming CEO, Entner said.
Steve Altman was the company’s lawyer who later became head of the patent licensing unit QTL. In that role, he oversaw the lucrative royalty stream that fueled Qualcomm’s rise over the past decade. He was promoted to president in 2005. In 2011, he was named Qualcomm’s vice chairman -- a job he still holds. Altman plans to retire next month.
Sanjay Jha, meanwhile, was Qualcomm’s chief operating officer and No. 2 executive until 2008. He left to become co-CEO of Motorola Inc. and later oversaw the sale of that company’s mobile-phone business to Google Inc. Len Lauer, who filled Jha’s position as COO, left in 2009 to take the CEO job at printer startup Memjet.