Elop, Mulally, Bates, Nadella on Microsoft's CEO Short List: Report

Ford CEO Alan Mulallay, former Nokia head Stephen Elop and two Microsoft executives are reportedly on a short list of candidates to replace Ballmer.

Microsoft, preparing for the retirement of CEO Steve Ballmer, has narrowed its list of replacement candidates to "about five people," Reuters reported Nov. 5, adding that the list had started with approximately 40 names.

Still on the list are former Nokia CEO Stephen Elop and Ford CEO Alan Mulally.

At least three internal candidates are also on the list, said the report, citing sources familiar with the matter. The certain inclusions are Tony Bates, the former CEO of Skype, now in charge of business development and evangelism at Microsoft; and Satya Nadella, Microsoft's head of cloud and the enterprise.

Reuters' sources added that it may still be several more months before Ballmer's replacement is officially selected.

Elop left a role as president of Microsoft's Business Division to take on the CEO position at Nokia in 2010. Shortly afterward, he spearheaded the effort to abandon the ailing Symbian operating system in favor of Microsoft's Windows Phone OS. And this fall, he negotiated the sale of Nokia's Devices & Services business to Microsoft for $7.1 billion.

Elop's departure made headlines—and earned him the ire of Nokia-loving Finns—when it was revealed that his departure package included a $25.5 million payout.

The New York Times called it an "expensive good-bye for the executive, who collected $6.2 million to go to Nokia from Microsoft in the first place."

During the third quarter, Nokia sold 8.8 million Windows Phone-running Lumia handsets—its most successful Lumia quarter to date. Still, put in context of the industry in which Nokia, once a market leader, must learn to again compete, Apple sold 9 million iPhones during the first weekend the iPhone 5S went on sale.

Mulally is, of course, celebrated for resisting the government bailout that Ford rivals General Motors and Chrysler accepted, and for turning around the car maker. In 2010, Automobile magazine named him Man of the Year.

"Mulally is living proof that a single, extraordinary leader with vision and determination really can make all the difference in an organization," the magazine wrote. It added that in 2006 Mulally was chosen by Bill Ford Jr. to head the company, despite having "absolutely no car experience," because he "demonstrated the ability to reinvent and reimagine an entire corporate culture."

Bates was at Cisco before being chosen to head Skype, and he has extensive experience in the Internet and telecommunications industries. He taught himself to code in college and holds 10 high-tech patents.

Nadella was president of Microsoft's $19 billion Server and Tools Business before taking over "Cloud OS," considered to be Microsoft's next-generation backend platform. Cloud OS is behind everything from Bing to Skype, Office 365 and Xbox Live.

Ballmer's Announced Retirement

On Aug. 23, Steve Ballmer announced his plan to leave the company within a year.

"There is never a perfect time for this type of transition, but now is the right time. We have embarked on a new strategy with a new organization, and we have an amazing Senior Leadership Team," Ballmer said in a statement.

Ballmer reorganized the company in July and introduced a "One Microsoft" strategy focused on "creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most."

John Thompson, lead independent director of Microsoft's board of directors, was put in charge of a special committee tasked with finding Ballmer's successor.

Microsoft co-founder Bill Gates is also a member of the committee, and Microsoft is said to be also soliciting advice from Silver Lake Managing Director Charles Giancarlo, a former Cisco executive.

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