Microsoft board motivated to hire new CEO before activist joins in early '14
ValueAct, which can claim its place on the board early next year, could throw a minor monkey wrench into the CEO selection process
Computerworld - Microsoft's board of directors wants to wrap up its search for a new CEO before the end of the year, Bloomberg said Wednesday, citing anonymous sources close to the action.
According to Bloomberg, the board's CEO search committee -- which includes co-founder and chairman Bill Gates and is led by John Thompson, a former Symantec CEO -- has already interviewed several candidates, been rebuffed by at least one, and is narrowing its choices.
The board hopes to have a Ballmer replacement before year's end.
While financial analysts have urged Microsoft to quickly pick a successor for Ballmer, if only to shorten the period of uncertainty about the new leader's direction, there is another reason for putting someone in place before the start of 2014.
In late August, Microsoft announced that it had reached agreement with ValueAct Capital, an activist shareholder that had been pressing for changes at Microsoft since earlier in the year.
Under the terms of the deal, Microsoft has given ValueAct president, G. Mason Morfit, the option to join the company's board of directors in early 2014, as well as said he could regularly meet with "selected Microsoft directors and management to discuss a range of significant business issues," according to a Microsoft statement at the time the agreement was made public.
In return for the board seat and other considerations, ValueAct has promised not to acquire more than 4.9% of Microsoft's outstanding shares, not to conduct any proxy fight, and not to "make any statement or announcement that constitutes an ad hominem attack on, or otherwise disparages or causes to be disparaged the Company or its affiliates or any of its current or former officers or directors," Microsoft's filing with the U.S. Securities and Exchange Commission (SEC) read.
If Morfit joins the board, he would be the first Microsoft director ever appointed under duress. As of July, ValueAct owned less than 1% of Microsoft.
But ValueAct's CEO, Jeffrey Ubben, who announced a $2 billion stake in Microsoft in April, had been agitating for a seat on the company's board. Ubben has also been linked to calls for Ballmer's ouster, and to general discontent among some shareholders that Microsoft was hoarding too much cash. Like many shareholders, ValueAct has reportedly expressed concern over several major mistakes by Microsoft, including falling behind in smartphones and tablets. At an investor conference, Ubben also called on Microsoft to make its lucrative Office software franchise more widely available on non-Windows platforms.
By beating the early 2014 date for Morfit's joining of the board, Microsoft's current directors can select the next CEO without outside interference. If the selection process drags into 2014, Morfit will have a voice -- albeit only one out of 10 -- on the board.
- Microsoft plans to patch critical under-attack IE bug next week
- Ballmer regrets not aping Apple sooner
- OS upgrades: Cheap is better than pricey, free is better than cheap
- Update: More top-tier Microsoft execs head for the door
- Microsoft ships Office 2013 SP1 the old-fashioned way
- Microsoft's 'go-low' play puts Windows revenue on the line
- Microsoft: Android Nokia not our call to make
- Gates sells another 20M shares; lead over Ballmer shrinks to nearly nothing
- Hey Microsoft, where's the next Mac Office?
- Microsoft dubs 'confusing' Office Web Apps as Office Online
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- eBook: An Executives' Guide: The Machine of the Future This eBook has been developed to help executives understand the value of M2M and IoT to enterprises. We will include a framework CEOs...
- Quantifying the Return on Investment: The Business Case for Machine-to-Machine Initiatives This paper uses real-world customer results and a set of key metrics to help executives and managers understand the return they should expect...
- Is There Still a Case for PMO? PMOs haven't always worked for all companies all of the time. Smart companies should review their PMO needs and activities through a PMO...
- Consequences of Poorly Performing Software Systems While performance issues are not always avoidable, their effects can be mitigated and often avoided by developing a keen understanding their causes and...
- How to Select the Right IoT Platform We are rapidly entering a world where almost everything will be connected to the cloud and managing these connected things and leveraging the...
- Integrated Infrastructure: Simplify Operations, Speed Deployments and Reduce Costs George Weiss, Gartner Vice President and Analyst, and Praveen Akkiraju, CEO of VCE, provide practical information regarding the various aspects of Integrated Infrastructures... All IT Leadership White Papers | Webcasts