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Microsoft Corporation (NASDAQ:MSFT) is finally doing what it should have done years ago. Is this the start of a new era in Redmond, or is it a day late and a dollar short?
The world’s largest software company is about to get a new CEO. Longtime leader Steve Ballmer will leave the CEO chair sometime in the next 12 months.
Investors love the very idea of losing Ballmer. Microsoft Corporation (NASDAQ:MSFT) shares jumped as much as 9.4% on the news. That’s good for a cool $28 billion in extra market cap value overnight, and the peak burst of positive energy added 23 points to the Dow Jones Industrial Average (DJINDICES:^DJI) index.
The announcement comes just weeks after Ballmer’s latest radical reorganization of Microsoft Corporation (NASDAQ:MSFT)’s leadership teams, meant to transform the company into a “devices and services” operation. Ballmer puts a positive spin on the timing of it all, claiming that it’s a good idea to bring aboard fresh long-term leadership in the middle of this important transformation. “There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in an internal memo.
I’m not sure I buy that argument.
This summer’s reorg seemed like a power play that consolidates even more power in the CEO’s office. Announcing your retirement right after an audacious power grab doesn’t make much sense. I’d argue that the board of directors finally got tired of Ballmer’s antics and pushed him out, as graciously as possible.
Feel free to refute my conclusion in the comments box below, but keep in mind that Ballmer isn’t part of the team that’s looking for a successor. His input on who’s to sit in his chair next will be, shall we say, limited.
Instead, the special committee is chaired by Microsoft Corporation (NASDAQ:MSFT)’s lead independent director, John Thompson. Chairman and industry legend Bill Gates is on the team, alongside the chairs of the audit and compensation committees.
And if you thought this crack team would look only at internal promotion candidates, headhunter firm Heidrick & Struggles International, Inc. (NASDAQ:HSII) is there to vet the field of outsider candidates. It’s a high-profile contract for Heidrick & Struggles International, Inc. (NASDAQ:HSII), but the stock fell 0.7% today anyhow.
The lack of popping champagne corks in the company’s Chicago headquarters is an indication of just how tough this recruitment drive will be.
Many single-day price jumps are destined to fade away, but this one makes sense in a long-term perspective. Ballmer’s heavy-handed management style and lack of innovative vision held the company back over the last 13 years. Replacing him won’t automagically fix all of Microsoft Corporation (NASDAQ:MSFT)’s problems, such as missing out on the mobile computing trend and botching the Windows 8 release several times over, but it’s definitely a step in the right direction.
The article Microsoft Finally Makes the Right Choice: CEO Ballmer Is Done originally appeared on Fool.com is written by Anders Bylund.
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