As Microsoft's CEO search continues into the new year, the company's past is reportedly causing candidates to keep their distance.
According to a report in The Wall Street Journal, candidates are wary of the lingering presence of current CEO Steve Ballmer and legendary co-founder (and ex-CEO) Bill Gates on the company's board after a new chief executive is named.
The Journal's Shira Ovide and Joann S. Lublin wrote that "corporate directors, management consultants and some executives contacted about the job say the potential for boardroom clashes at Microsoft is a turnoff." In meetings with Microsoft's board, some external executives "expressed concerns about being hamstrung if the two men continue to serve on the board, according to people familiar with their thinking," they said.
Negotiations are said to involve spelling out just how much influence Ballmer and Gates will wield on the New CEO. "Outside CEO candidates 'know that part of what they are negotiating for is the level of engagement' of Mr. Ballmer and Mr. Gates once the new leader takes charge, a person familiar with the matter said," according to The Journal report.
Former Apple executive Jean-Louis Gassée, who has served on public company boards, told the publication, "No CEO worthy of the title wants his or her predecessors second-guessing everything in the boardroom."
The article notes that if Ballmer and Gates remain on Microsoft's board, the IT giant "would be an outlier. Just eight companies in the S&P 500 index have two of their former CEOs as directors, according to Equilar Inc., which tracks executive compensation."
Steve Ballmer announced his impending retirement on Aug. 23 and set a 12-month deadline for his departure. In a statement, he said, "We need a CEO who will be here longer term for this new direction," which refers to the company's "One Microsoft" strategy, which kicked off a massive corporate reorganization in July.
The selection committee includes Bill Gates. "I'll work closely with the other members of the board to identify a great new CEO. We're fortunate to have Steve in his role until the new CEO assumes these duties," he said.
Gates recently faced calls to step down as chairman of Microsoft. In an Oct. 1 report in Reuters, some top Microsoft investors echoed some of the concerns expressed by outside candidates for the CEO role. Among the factors they cite as reasons for Gates to leave are his dwindling shares in the company—he'll have no financial stake in the company by 2018 at current levels of divestiture—and his role in the selection process.
Before the holidays, Microsoft Director John W. Thompson provided an update on the CEO selection process, admitting that the company wouldn't have a new CEO before the start of the new year. "We're moving ahead well, and I expect we'll complete our work in the early part of 2014," he said.