Microsoft Said To Be Negotiating Satya Nadella’s Contract

Microsoft Corporation (NASDAQ:MSFT) could announce its next CEO as early as next week, according to recent media reports, which have also indicated that current Microsoft executive Satya Nadella is ahead in the race. Now Monica Langley of The Wall Street Journal cites sources who say that Microsoft is actually negotiating a contract with Nadella to make him the next CEO.

Nadella could team up with Gates

This week we also heard that Bill Gates could step down as Microsoft Corporation (NASDAQ:MSFT)’s chairman, and then this morning, we heard that he could be taking on a new role. The Wall Street Journal echoes the earlier report from Kara Swisher of re/code, who said Nadella had asked Gates to spend more time assisting him with technology and strategy in his role as CEO.

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The WSJ’s source said Microsoft Corporation (NASDAQ:MSFT)’s board of directors is expected to meet early next week to approve the contract with Nadella and decide whether Gates should step down as chairman and a new chair be selected.

Who will Microsoft’s next chairman be?

If Bill Gates does step down, it has been reported that independent director John Thompson could become the new chairman. However, this latest report from The WSJ indicates that there still is no definitive agreement that Gates will step down. Also someone else told the newspaper that Thompson isn’t very interested in taking on the chairman rule. Apparently it will take some convincing to get him to take the position.

Microsoft chooses from a long list of candidates

If Nadella does end up being the final choice for CEO, then it seems clear that Microsoft Corporation (NASDAQ:MSFT) preferred the idea of an insider to someone from outside the company with already proven experience in executing turnarounds and running a company the size of Microsoft. Nadella has been with the company or more than two decades, but he has never been in charge of a company as big as Microsoft.

Microsoft Corporation (NASDAQ:MSFT)’s revenue was $78 billion for the year which ended in June. Nadella’s responsibilities include heading up the company’s corporate software division, which had approximately $20 billion in revenue. Nadella’s division of Microsoft also makes up about two-thirds of the company’s gross profits.

Also the selection of an insider like Nadella suggests that Microsoft Corporation (NASDAQ:MSFT) will continue with the strategy put in place by outgoing CEO Steve Ballmer. Ballmer announced a major reorganization last year around the time he announced that he was retiring.

Shares of Microsoft Corporation (NASDAQ:MSFT) rose more than 2% in intra-day trading.