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Microsoft CEO Candidate List Is Said to Include Ericsson's Vestberg

By Dina Bass, Jonathan Erlichman, Beth Jinks and Peter Burrows
January 16, 2014 5:37 PM EST 28 Comments
Ericsson CEO Hans Vestberg
Ericsson CEO Hans Vestberg

Microsoft Corp. (MSFT)’s board is considering Ericsson AB Chief Executive Officer Hans Vestberg as a potential successor to departing leader Steve Ballmer, according to people briefed on the search.

Vestberg, 48, is in the running alongside other candidates, said the people, who asked not to be identified because the process is private. Microsoft cloud-computing chief Satya Nadella and former Nokia Oyj CEO Stephen Elop, as well as other outsiders, are also on the list, people familiar with the search have said. The board hasn’t yet reached a decision and who is under consideration is still subject to change.

Microsoft’s lead independent director John Thompson, who is heading the search, wrote in a December blog post that the board plans to complete a search in the “early part of 2014.” He said the board started with more than 100 candidates and has since narrowed the list. Ballmer said last August that he planned to retire within a year.

“We never comment on rumors and speculation,” said Ola Rembe, a spokesman for Stockholm-based Ericsson, in response to questions about Vestberg’s Microsoft candidacy. Peter Wootton, a spokesman for Microsoft, declined to comment or to make executives available.

Shares of Ericsson fell 1.2 percent to 77.8 kronor at the close in Stockholm. Microsoft shares gained less than 1 percent to $36.89 at the close in New York.

Search Hurdles

The search has been dogged with difficulty. Any new CEO will have to turn around Microsoft, whose main software business is struggling. At the same time, the Redmond, Washington-based company has made limited headway in fast-growing markets such as smartphones and tablets. Ballmer and Microsoft co-founder Bill Gates, who together hold about 8 percent of the stock, are also on the board. Their presence has deterred some candidates, raising concern that a new CEO might lack independence in the role, said people familiar with some of the candidates’ thinking.

Some CEO candidates have said no or dropped out of the running, people with knowledge of the search have said. Ford Motor Co. CEO Alan Mulally, 68, who had been under consideration for the Microsoft job, said last week that he plans to stay at the automaker. Mulally’s candidacy for Microsoft CEO had faded amid questions about his age and lack of technology experience, people with knowledge of the search have said.

Other Concerns

Mulally was also concerned about whether Gates and Ballmer will give the new CEO room to maneuver in the job, said a person with knowledge of the matter. The openness of the search process, with Mulally’s candidacy raising distractions for Ford, didn’t help, said the person.

Jessica Enoch, a spokeswoman for Ford, didn’t return a call for comment.

Other CEO candidates have included Microsoft Executive Vice President Tony Bates and Chief Operating Officer Kevin Turner, people familiar with the matter have said.

Vestberg joined Ericsson in 1988 and served as the company’s chief financial officer from 2007 to 2009 before becoming CEO in January 2010. He has held management positions at Ericsson in China, Brazil, Mexico and the U.S., the company said on its website.

Since becoming CEO, Vestberg has overseen the dismantling of the Sony Ericsson handset joint venture, and invested to increase sales of services such as running networks for phone companies that don’t want to do it themselves.

19 Percent

Under Vestberg, Ericsson shares have risen about 19 percent, while revenues are up from 206 billion kronor ($32 billion) in 2009 to an estimated 225 billion in 2013, according to analyst estimates compiled by Bloomberg.

Last September, Ericsson completed its acquisition of Microsoft’s Mediaroom unit, which makes software used by phone companies to deliver TV services via broadband networks.

Vestberg is also an accomplished handball player who is chairman of the Swedish Handball Association, and played on a team during a stint in Chile for Ericsson, said Rembe. The CEO has raised Ericsson’s profile externally, including a keynote at the Consumer Electronics Show in 2012.

“He’s definitely the public face of Ericsson,” said Mark McKechnie, an analyst with Evercore Partners. “He’s an up-and-comer. He’s young, energetic and very visible, and he has Ericsson on the right path.”

In a video on Ericsson’s website, Vestberg said he had worked in almost every part of the company except for research and development.

“I’ve spent all my life in Ericsson, and I will never regret that because it’s a fantastic company,” he said. He added that he is a stickler about leaving his phone and other technologies off during the weekend, to focus on family and personal life. “I need to be fresh, I need to have ideas” to help motivate his company, he said.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Jonathan Erlichman in New York at jerlichman1@bloomberg.net; Beth Jinks in New York at bjinks1@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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