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.