Steve Ballmer Makes A Smart Exit From Microsoft Board

by CXOtoday News Desk    Aug 20, 2014

steve ballmer

Former Microsoft Corp Chief Executive Steve Ballmer has left the software company’s board in order to spend more time on his newly acquired Los Angeles Clippers basketball team, indicated that his duties as team owner, among other interests, wouldn’t leave him enough time to stay on Microsoft’s board. However, he said he plans to hang on to his 4 percent stake in Microsoft.

In a letter to Microsoft CEO Satya Nadella, the 58-year old veteran wrote: “I think it would be impractical for me to continue to serve on the board, and it is best for me to move off,”. He mentioned: “a combination of the Clippers, civic contribution, teaching and study - are taking a lot of time. 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.”

Ballmer has paid an NBA-record $2 billion for the Clippers. On Monday he greeted several thousand fans gathered at the team’s Staples Center home with the trademark screams that punctuated employee meetings at Microsoft, says a Reuters report..

Ballmer’s exit marks the end of a 34-year association with the company that led the PC revolution. He joined Bill Gates in 1980 when it was just a small startup in the Seattle suburbs, and succeeded him as CEO from 2000 until this February.

While experts believe, his decision to step down from the board is not surprising after 12 months of change, especially as to avoid potential board tension between Microsoft’s new generation leader sand the old regime. Ever since Nadella stepped in as the CEO, he has attempted to move the company away from its traditional PC-focused mindset toward mobile-cloud computing.

Last year, around this time, Ballmer announced his plan to retire from Microsoft as the CEO, followed by a 5 months of uncertainty till Nadella was appointed CEO and co-founder Gates stepped down as chairman. Ballmer also has a significant financial stake in Microsoft’s future, surpassing Gates, as the largest individual shareholder in Microsoft. As Gates sells shares to fund his philanthropy, Ballmer has become the biggest individual shareholder in Microsoft, owning a 4 percent stake worth about $15 billion.

In his resignation letter, Ballmer indicated that he wouldn’t completely cut himself off from his former company. “Count on me to keep ideas and inputs flowing,” Mr. Ballmer wrote. “I bleed Microsoft—I have for 34 years and I always will.”

Analysts believe Nadella’s exit should help cement the regime and strategy of his successor Satya Nadella, as analyst Frank Scavo, managing partner of IT consulting firm Strativa notes, “I think it’s a classy move by Ballmer. It shows his confidence in Nadella, allowing Nadella to move forward without worrying about what Ballmer thinks.”

FBR Capital Markets analyst Daniel Ives also commented that Ballmer’s exit from the board represents a positive, as it leaves the company with a clean sheet of paper.