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Originally published August 19, 2014 at 11:57 AM | Page modified August 20, 2014 at 6:05 PM

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Ballmer’s sole role at Microsoft now is investor

His decision to step down from the board of directors sheds the last of the former CEO’s management ties, ending a 34-year leadership role with the software giant.

Seattle Times business reporters

Ballmer at Microsoft

June 1980: Hired by Harvard friend Bill Gates as employee No. 30, runs Microsoft financial and organizational operations

February 1992: Named executive vice president for sales and support

July 1998: Named president

January 2000: Becomes CEO, succeeding Gates, who continues as chairman. Also named to company’s board of directors

August 2013: Announces plans to retire from the company

February 2014: Satya Nadella announced as his successor

August 2014: Steps down from the board

Seattle Times archives

Steve Ballmer

Age: 58

Occupation: Owner, L.A. Clippers

Net worth: $18 billion, estimated by Forbes

Education: Bachelor’s degree in mathematics and economics from Harvard University; attended Stanford University Graduate School of Business

City of residence: Hunts Point

Family: Married, three sons


By stepping down from Microsoft’s board of directors Tuesday, Steve Ballmer shed the last of his management ties to the company, ending one of the most lucrative but ultimately mixed leadership runs in corporate America.

Ballmer sent a letter Tuesday to Microsoft CEO Satya Nadella saying he would leave the board “effective immediately.”

“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,” Ballmer wrote.

Ballmer said he plans to continue to hold his massive stake in the software giant, the largest individual holding in Microsoft since co-founder Bill Gates began divesting shares to fund his phil­anthropy.

“I expect to continue holding that position for the foreseeable future,” Ballmer wrote.

The news comes a bit more than six months after Microsoft replaced Ballmer with Nadella, and almost exactly a year after Ballmer announced plans to step down as CEO. Ballmer left amid shareholder pressure as Microsoft’s stock largely languished for more than a decade, while the company fell behind Google and Apple in consumer markets.

A Microsoft spokesman said Ballmer was not asked to leave the board.

Other than Gates, there may be no one more indelibly etched in Microsoft’s history than Ballmer, not even the company’s other co-founder, Paul Allen.

Ballmer spent 34 years at Microsoft and amassed a fortune that Forbes magazine pegged at $18 billion. Just last week, he spent $2 billion of that money to acquire the Los Angeles Clippers basketball franchise.

In his letter to Nadella, Ballmer said the Clippers, along with a new teaching gig, will keep his schedule “hectic.”

The Microsoft spokesman was uncertain where Ballmer would teach, though Ballmer had told the Los Angeles Times in May he was considering teaching at the University of Southern California’s Marshall School of Business. His eldest son recently graduated from USC.

In response to Ballmer’s letter, Nadella offered gratitude and well wishes.

“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,” Nadella wrote. “I also look forward to partnering with you as a shareholder.”

In a statement, Gates said: “Steve has been one of my closest partners and his contribution to Microsoft for more than 34 years is simply beyond description. I wish him all the best and can’t wait to see the incredible success he has with the Clippers.”

Ballmer remains one of Microsoft’s biggest investors, with more than 333 million shares, or 4.04 percent of the company, according to the latest Bloomberg data. That makes him the company’s largest individual shareholder and its fourth-largest shareholder overall. BlackRock investment management company is the largest.

Despite a 14-year tenure as CEO that saw revenue more than triple, profits double and earnings per share grow, the company missed the boat or fell behind in key areas such as search and mobile.

When Ballmer took over as CEO on Jan. 13, 2000, during the dot-com boom era, Microsoft’s share price was at $48.51. It stagnated in the $20-$35 range for much of the next decade.

Calls for Ballmer to step away from Microsoft had intensified in recent years.

In 2011, hedge-fund manager David Einhorn called for Ballmer to leave, calling his continued presence as CEO “the biggest overhang on Microsoft stock.”

A spokesman for Greenlight Capital, Einhorn’s hedge fund, declined to comment Tuesday.

More recently, there was pressure from other shareholders, including a move by activist investor ValueAct Capital to gain a board seat and push for changes. ValueAct was able to get that seat, currently filled by its president, G. Mason Morfit.

When Ballmer announced his retirement from the top job last August, the stock jumped 7 percent to $34.75. The shares closed Tuesday at $45.33, up 1 percent.

Ballmer’s exit from the board was not a big surprise, said Rick Sherlund, an analyst with investment bank Nomura, who said last fall he believed Ballmer might step down.

“I think investors will be hopeful that there’s some change in the dynamics of the boardroom with Ballmer’s departure and Bill [Gates] no longer chairman,” Sherlund said Tuesday.

Gates stepped down as board chairman in February, while continuing to serve as a director on the board. John Thompson, CEO of Virtual Instruments, is the current chairman.

Some of the changes investors might hope for, Sherlund said, include “that maybe the directors will engage more directly with their shareholders and that we might see some actions to return more value to shareholders.”

Tuesday’s announcement “marks the final chapter in the ‘Ballmer era’ at Microsoft,’ Daniel Ives, an analyst with investment bank FBR & Co., wrote in an email.

“We believe it removes the final ‘Ballmer overhang’ at Microsoft,” Ives wrote. “While Mr. Ballmer has been less involved in Microsoft’s operations since retiring earlier this year, we think that his resignation from the board represents a positive, as it leaves the company with a ‘clean sheet of paper’ as to which direction this technology stalwart may head over the coming years in its quest to find greener growth pastures.

“With Nadella leading the charge,” Ives continued, “we believe more changes at the board level to better align with Microsoft’s cloud/mobile strategy would be a positive.”

Jay Greene: 206-464-2231 or On Twitter @janettu.

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