Microsoft culls list of CEO candidates

Reuters reports that the list includes more outsiders than insiders

Microsoft has shortened its list of CEO candidates to a minimum of eight, including five outsiders and three current executives, according to the Reuters news service.

The four names revealed by sources to Reuters, however, have all been previously mentioned as among the possible replacements for outgoing chief executive Steve Ballmer, who in late August abruptly announced his impending retirement.

Among the outsiders that have made the short list, said the news service, are Ford Motor CEO Alan Mulally and former Nokia chief Stephen Elop, who stepped down from the Finnish company's top spot when Microsoft announced its intent to acquire the firm's handset business and license its patents for $7.2 billion.

Elop continues to work at Nokia as the head of its devices division, but will rejoin Microsoft in early 2014, assuming government regulators clear the purchase.

Insiders Tony Bates, who leads Microsoft's business development and evangelism, and Satya Nadella, the head of the Cloud and Enterprise group, were those named of the "at least three" in-house candidates to make the cut.

At one time or another, all four men have been floated as Ballmer's successor, with Mulally and Elop touted as leading candidates.

None of those named by Reuters were dark horses, in that they all have connections to Microsoft, have worked there or currently serve as executives. Mulally, for example, advised Ballmer on the latter's corporate reorganization plans, which Microsoft unveiled in July.

The Reuters story was one of the first in several weeks that has leaked details of discussions of the Microsoft board of directors, which will select the new CEO. The most recent before yesterday was a piece by Bloomberg nearly a month ago that claimed the board wanted to wrap up its search before the end of the year.

Microsoft is not working under a tight deadline -- in August the company said Ballmer would remain as CEO for as long as 12 months -- but financial analysts have urged the Redmond, Wash. technology giant to act quickly to shorten the period of uncertainty about the new leader's direction.

One possible time pressure point comes from Microsoft's decision to add a new board member in January under an agreement with ValueAct Capital, an activist shareholder that had been pressing for changes. In return for the board seat and other considerations, ValueAct has made several promises, including not to conduct a proxy fight and not to "disparage the Company ... or any of its current or former officers or directors."

The addition of an outsider to the board could complicate matters if, as some believe, Ballmer and co-founder and current chairman Bill Gates push for someone who will continue the strategic pivot to a devices-and-services strategy, which has detractors.

Industry analysts have urged Microsoft to choose someone not connected to the company, in large part because they believe only an outsider can sufficiently shake up the firm.

According to Reuters, although the board has narrowed the go-to list, it may be several more months before it appoints a new CEO.

Microsoft remains extremely profitable, with revenue in the quarter ending Sept. 30 of $18.5 billion, up 16% from the same period in 2012. Net income of $5.2 billion was up about 17%.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

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This story, "Microsoft culls list of CEO candidates" was originally published by Computerworld.

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