Steve Ballmer Planned Departure in 2010, Earned $768 Million by Quitting

| Editorial

Bloomberg reported Friday evening that Microsoft CEO Steve Ballmer began the process of departing Microsoft in 2010. The news paints the picture of a Steve Ballmer who was ready to step down, rather than being forced out by the company's board of directors.

Of course, I'd argue that the board has been derelict for not canning Mr. Ballmer years ago. I've written piece after piece arguing that Microsoft needs a product visionary at the helm, and that Mr. Ballmer needs to go.

But that would just be me saying "I told you so."

In any event, Bloomberg presented a behind-the-scenes look at Mr. Ballmer's departure, which was announced on Friday, that includes some interesting tidbits.

1.) As noted above, Mr. Ballmer planted the seeds of his departure in 2010 when he asked the board what a succession plan would look like. At that point, they began putting that process into place, and we're merely moving on to the next phase with Mr. Ballmer's retirement announcement.

2.) As noted in the title, the news of his quitting earned Mr. Ballmer a staggering fortune. Microsoft's stock jumped 7.29 percent (US$2.36) on the news that he was quitting. He owns some 4 percent of Microsoft (roughly 333 million shares), and Bloomberg noted that meant his personal net worth jumped by $786 million. By quitting. Wowza.

Oh, it looks like I get to use this image again. I best do it while I still can:

Microsoft CEO Steve Ballmer

Microsoft CEO Steve Ballmer

3.) Like Gil Amelio during his brief tenure at Apple, Mr. Ballmer has cut a lot of fat at Microsoft in recent years. That could make it easier for his successor to change directions.

4.) Microsoft Chairman Bill Gates did not ask Mr. Ballmer to stay when he told the board he was retiring. On the one hand, ouch. On the other hand, I've been wondering precisely how that would play out, so thanks, Bloomberg, for satisfying my curiosity.

5.) Bill Gates will be on the committee to find a replacement for Mr. Ballmer, but the search will be led by John Thompson. Bloomberg said that Mr. Thompson is Microsoft's lead independent director.

Honestly, I'm proud of Mr. Ballmer for stepping down. I've been saying recently that I think he loves Microsoft so much that he'd die for the company, but that he didn't love it enough to quit. It seems I was wrong, even if it should have happened earlier.

Actually, Bill Gates should be spanked for putting Mr. Ballmer in this position to begin with. Mr. Ballmer's accomplishments at Microsoft as a sales guy are phenomenal.

As Steve Jobs pointed out, though, you need a product person in charge of a product company. Not a sales person, not a bean counter, and not a marketing person. You need a product person.

Hopefully Microsoft has learned that lesson and will find the product visionary it needs to transition into a post-PC world.

Comments

Pashtun Wally

Just for giggles, y’know, but I’d LOVE to see Woz get the spot….

Terrin

Earned is the wrong word. Perhaps he will make the money, but he did not earn it, which requires labor. Resigning is not labor.

wab95

Bryan:

I for one have mixed feelings about this news.

One the one hand, I concur with you that this move is passed time. As such, it raises the question of the purpose of the move, particularly at this time.

If the purpose of the move is simply punitive and intended as a palliative for investors, then job done, as the share price attests. In my view, this is a meaningless gesture, as it will do nothing for the company in the long run.

If the move is intended to provide a course correction, somehow capitalising on MS’s restructuring in a way that enables it to compete as a post-PC company, and bring competitive products and services to bear, then my feelings are decidedly guarded. This long into the game, my gut sense is that MS have too deeply entrenched a corporate culture to reinvent themselves in time enough to board this train - which truth be told, left the station a long time ago. I feel that this will be not unlike the attempts at Blackberry to recast themselves from an email platform to a smartphone platform in the eyes of the public. Despite their best intentions, neither their corporate culture, nor the public’s perceptions, both deeply entrenched, permitted that to be a successful transition.

If anything, I would think MS’s best play at this stage would be to provide supportive products and services to the mobile commuting industry, primarily, and then secondarily attempt modest, low-risk forays into their own product offerings, having observed the industry a supportive perspective. Tis might help them to identify untapped opportunity.

Even to do this, much will depend on that next CEO and his/her capacity to manage expectations while imparting a new vision and the series of steps necessary to accomplish it. Intuition would argue for an outsider not lulled into the torpor that is the fruit of MS’s current post-PC culture. My sense is that this will not happen, based upon the empirical observations of failure within established companies to successfully and competitively transition using outside blood (Apple, HP, amongst others); and that they will go with someone steeped in MS corporate culture and methodology if not history; but that is a topic for another time.

wab95

BTW: autocorrect changed ‘mobile computing’ to ‘mobile commuting’, but I think one gets the intent in my comment above.

Lee Dronick

See today’s Joy of Tech comic http://www.geekculture.com/joyoftech/joyarchives/1892.html

wab95

Very nice, Lee.

There’s also an interesting read on CNN about ‘What if Steve Ballmer ran Apple?’ http://tech.fortune.cnn.com/2013/08/26/apple-ballmer-microsoft-thompson/?iid=SF_F_River

Lee Dronick

Interesting article Wab, it is a matter of balance.

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