Steve Ballmer Quits Microsoft's Board, Will Focus on Clippers and Study

Former Microsoft CEO Steve Ballmer announced Tuesday that he was quitting the company's board of directors, effective immediately. In a letter to new CEO Satya Nadella published by Microsoft, and reprinted below, Mr. Ballmer said he was leaving the board because he saw, "a combination of the Clippers, civic contribution, teaching and study taking a lot of time."

Steve Ballmer, Clippers Owner

Steve Ballmer, Clippers Owner

Mr. Ballmer's letter largely serves as an endorsement for change at Microsoft, and there are times when one could read it as saying that Mr. Nadella needs a board fully committed to that change. The implication could be that Mr. Ballmer isn't the best instrument for achieving monumental changes—if so, it's a big admission for a man who says in the same letter that he bleeds Microsoft and "always will."

"Microsoft will need to be bold and make big bets to succeed in this new environment," Mr. Ballmer wrote. "Making that change while also managing the existing software business well requires a boldness and fearlessness that I believe the management team has. Our board must also support and encourage that fearlessness for shareholders to get the best performance from Microsoft. You must drive that."

In another passage, he also makes it clear that he simply doesn't have enough time to focus on Microsoft's board, saying:

Given my confidence and the multitude of new commitments I am taking on now, I think it would be impractical for me to continue to serve on the board, and it is best for me to move off. The fall will be hectic between teaching a new class and the start of the NBA season so my departure from the board is effective immediately.

In a related note, Mr. Ballmer recently addressed fans of the L.A. Clippers, the Los Angeles NBA team he recently purchased from Donald Sterling for US$2 billion. There's a video of that address, where Mr. Ballmers's infamously exuberant rallying style seems far more at home than it did at, say, a developer conference.

Mr. Ballmer also stipulated that he would be holding his vast stake in Microsoft for the "foreseeable future." The former CEO owns some 300 million shares of the company, a roughly 4 percent stake worth more than $13 billion as of this writing.

Shares of Microsoft ended the day higher at $45.33, a gain of $0.500 (+1.12 percent), on moderate volume.

Next: Steve Ballmer's Resignation Letter in Full

Page 2 - Steve Ballmer's Resignation Letter in Full

 

Below are Steve Ballmer's resignation letter to Satya Nadella and Mr. Nadella's response, in full.

Dear Satya,

As I approach the six month mark of my retirement and your appointment as CEO, I have been reflecting on my life, my ongoing ownership of Microsoft stock, and my involvement with the company. I have reached some conclusions and wanted to share them with you. I know August is the key month during which the company starts to prepare the proxy statement for the next shareholders’ meeting, and so these thoughts are probably timely for that too.

First, Microsoft has been my life’s work and I am proud of that and excited by what I see in front of the company and this leadership team. There are challenges ahead but the opportunities are even larger. No company in the world has the mix of software skills, cloud skills, and hardware skills we have assembled. We draw talent as well as any company in the world. We have the profitability to invest in long-term opportunities and still deliver superior shorter term performance. You’re off to a bold and exciting start.

Microsoft will need to be bold and make big bets to succeed in this new environment. Writing great software is a tremendous accomplishment and selling software has been a fabulous business. In the mobile-first, cloud-first world, software development is a key skill, but success requires moving to monetization through enterprise subscriptions, hardware gross margins, and advertising revenues. Making that change while also managing the existing software business well requires a boldness and fearlessness that I believe the management team has. Our board must also support and encourage that fearlessness for shareholders to get the best performance from Microsoft. You must drive that.

I had not spent any time really contemplating my post-Microsoft life until my last day with the company. In the six months since leaving, I have become very busy. I see a combination of the Clippers, civic contribution, teaching and study taking a lot of time. I have confidence in our approach of mobile-first, cloud-first, and in our primary innovation emphasis on platforms and productivity and the building of capability in devices and services as core business drivers. I hold more Microsoft shares than anyone other than index funds and love the mix of profits, investments and dividends returned in our stock. I expect to continue holding that position for the foreseeable future.

Given my confidence and the multitude of new commitments I am taking on now, I think it would be impractical for me to continue to serve on the board, and it is best for me to move off. The fall will be hectic between teaching a new class and the start of the NBA season so my departure from the board is effective immediately.

I bleed Microsoft — have for 34 years and I always will. I continue to love discussing the company’s future. I love trying new products and sending feedback. I love reading about what is going on at the company. Count on me to keep ideas and inputs flowing. The company will move to higher heights. I will be proud, and I will benefit through my share ownership. I promise to support and encourage boldness by management in my role as a shareholder in any way I can.

All the best,

Steve

And Satya Nadella's response:

Steve,

First, thank you for all of your support during my transition this year and for the past 34 years. It’s been a great privilege to have worked with you and learned from you. Under your leadership, we created an incredible foundation that we continue to build on — and Microsoft will thrive in the mobile-first, cloud-first world.

While your insights and leadership will be greatly missed as part of the board, I understand and support your decision.

As you embark on your new journey, I am sure that you will bring the same boldness, passion and impact to your new endeavors that you brought to Microsoft, and we wish you incredible success. I also look forward to partnering with you as a shareholder.

On behalf of all of Microsoft and the Board of Directors, thank you.

Satya