Pacific Business SchoolA Contemporary Report on the Topic

Microsoft New Ceo

MBA Second Semester

2013-15

Submitted to: - Submitted By:-

Mrs. Shivani Kawadiya Mr. Satyanarayan Joshi

S.NO. CHAPTER NAME PAGE NO.

1. INTRODUCTION 3

2. JOURNEY TO THE CEO 4 – 6

3. REASON FOR CHANGING CEO OF MICROSOFT

7

4. MICROSOFT’S ALL ACQUITISION’S

8

5. SATYA NADELLA’S ANNUAL SALARY

9- 10

6. VISION OF SATYA NADELLA FOR MICROSOFT

11-12

7. SATYA NADELLA’S LIFE BEFORE MICROSOFT

13-14

8. THOUGHT OF SATYA NADELLA 15

9. BIBILOGRAPHY 16

10. DECLARATION 17

INTRODUCTION

Microsoft Corp. today announced that its Board of Directors has appointed Satya Nadella as Chief Executive Officer and member of the Board of Directors effective immediately. Nadella previously held the position of Executive Vice President of Microsoft’s Cloud and Enterprise group. 

And he is now the Chief Executive Officer of Microsoft

Satya Nadella

Journey to the CEO

“During this time of transformation, there is no better person to lead Microsoft than Satya Nadella,” said Bill Gates, Microsoft’s Founder and Member of the Board of Directors. “Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together. His vision for how technology will be used and experienced around the world is exactly what Microsoft needs as the company enters its next chapter of expanded product innovation and growth.” 

Since joining the company in 1992, Nadella has spearheaded major strategy and technical shifts across the company’s portfolio of products and services, most notably the company’s move to the cloud and the development of one of the largest cloud infrastructures in the world supporting Bing, Xbox, Office and other services. During his tenure overseeing Microsoft’s Server and Tools Business, the division outperformed the market and took share from competitors. 

“Microsoft is one of those rare companies to have truly revolutionized the world through technology, and I couldn’t be more honoured to have been chosen to lead the company,” Nadella said. “The opportunity ahead for Microsoft is vast, but to seize it, we must focus clearly, move faster and continue to transform. A big part of my job is to accelerate our ability to bring

innovative products to our customers more quickly.” 

“Having worked with him for more than 20 years, I know that Satya is the right leader at the right time for Microsoft,” said Steve Ballmer, who announced on Aug. 23, 2013 that he would retire once a successor was named. “I’ve had the distinct privilege of working with the most talented employees and senior leadership team in the industry, and I know their passion and hunger for greatness will only grow stronger under Satya’s leadership.” 

Microsoft also announced that Bill Gates, previously Chairman of the Board of Directors, will assume a new role on the Board as Founder and Technology Advisor, and will devote more time to the company, supporting Nadella in shaping technology and product direction. John Thompson, lead independent director for the Board of Directors, will assume the role of Chairman of the Board of Directors and remain an independent director on the Board. 

“Satya is clearly the best person to lead Microsoft, and he has the unanimous support of our Board,” Thompson said. “The Board took the thoughtful approach that our shareholders, customers, partners and employees expected and deserved.” 

With the addition of Nadella, Microsoft’s Board of Directors consists of Ballmer; Dina Dublon, former Chief Financial Officer of JPMorgan Chase; Gates; Maria M. Klawe, President of Harvey Mudd College; Stephen J. Luczo, Chairman and Chief Executive Officer of Seagate Technology PLC; David F. Marquardt, General Partner at August

Capital; Nadella; Charles H. Noski, former Vice Chairman of Bank of America Corp.; Dr. Helmut Panke, former Chairman of the Board of Management at BMW Bayerische Motoren Werke AG; and Thompson, Chief Executive Officer of Virtual Instruments. Seven of the 10 board members are independent of Microsoft, which is consistent with the requirement in the company’s governance guidelines that a substantial majority be independent.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Reasons for changing CEO of Microsoft

Microsoft has not done itself or Nadella any favors by taking this long to pick a CEO. To outsiders, it seems that Microsoft’s board was uninspired by internal candidates, decided to go hunting elsewhere, couldn’t find a fit, and then returned home to settle on a familiar face.

As Bloomberg News reported, there also appears to be talk of replacing Bill Gates as chairman with an existing board member. That’s an odd move, too. It represents a big break with the past and a willingness to change, for sure. But Microsoft’s board isn’t exactly known as the most proactive, decisive bunch. So trade Gates, the legend, for a lesser figure? It’s hard to imagine anyone doing a monkey boy dance for that.

Microsoft’s all acquisitions

Microsoft bought Visio, $ 1.3 Billion, 2000

Microsoft bought Navision, the 1.3Billion$ 2002

Microsoft bought a Quantive, the $6.2Billion, 2007

MicrosoftboughtFast Search &Transfer, $1.2 Billion, 2008

Microsoft bought Skype from eBay, $8.5Billion, 2011.

Microsoft Yammer bought the $1.2 Billion, 2012.

Microsoft Nokia's devices and services unit purchased, $7.2Billionby 2013.

Satya Nadella’s Annual Salary

Cricket-loving Satya Nadella will get a base annual salary of $1.2 million as new CEO of Microsoft, but his overall package after taking into account bonus and stock awards may reach $18 million (Rs 112 crore) a year besides various other perks.

According to his new employment agreement, the Indian-origin CEO of $78-billion software major will be paid his salary on semi-monthly basis at an annual rate of $1.2 million (Rs 7.5 crore).

46-year-old Nadella, who has been with Microsoft for 22 years, would also be eligible for a cash bonus, which can range from zero to 300 per cent, resulting into total payout of up to $3.6 million. Besides, he would get stock awards to the tune of $13.2 million, taking the total package to $18 million.

Nadella's annual salary would be determined by the company's Executive Incentive Programme (EIP) . The top executive would be eligible for an annual EIP stock award worth $13.2 million starting 2015 fiscal year, according to Microsoft's offer letter to Nadella.

"For Microsoft's 2014 and 2015 fiscal years, your annual cash award target will be 300 per cent of your salary earned as CEO during the fiscal year. Your actual cash award can be from 0-300 per cent of the target and will be based on your performance as evaluated by the Board," the letter said, a copy of which has been submitted to the US market regulator Securities and Exchange Commission (SEC) also.

Nadella, who became the third CEO of Microsoft after Bill Gates and Steve Ballmer, was paid an annual salary of $675,000 for the fiscal year 2013 as the President of the firm's server and tools business.

Going by reports, Nadella pocketed a cash bonus of $1.6 million last year. Microsoft's fiscal year runs from July 1 to June 30.

"We expect that you will work with the Compensation Committee of the Board to assess and revise, if appropriate, the EIP to ensure alignment with business priorities. There are currently two key components of the EIP," the letter said.

To further align Nadella's interests with the long-term performance of Microsoft, he would be granted Long-Term Performance Stock Awards (LTPSAs). "One-third of your LTPSAs will be earned based on Microsoft's total shareholder return relative to the S&P 500 over each of three overlapping, five-year performance periods (LTPSA performance periods) commencing on the grant date and the first and second anniversaries thereof," the letter said.

Vision of Satya Nadella for Microsoft

The new CEO reiterated that his focus is for Microsoft to become a "mobile first" and "cloud first" company, but he offered more details on what those phrases actually mean. "When we say mobile first, we really mean mobility first," Nadella explained. "It's about offering users a great experience across devices, some ours, some not ours, that we we can power uniquely."

For the cloud, Nadella is committed to the ongoing mission of one cloud for everyone and for every device. That mantra is remarkably simple to Microsoft's original mission statement: "A personal computer on every desk and in every home, running Microsoft software."

When it comes to Windows, Nadella said the new mobile-first and cloud-first focal points mean thinking about Windows differently. "We're starting to think of it as one family, which wasn't true before," Nadella said.

In other words, his vision is for Microsoft is for it to become less reliant on vertical integration — and more able to work alongside other systems.

When it comes to planning and executing for the future, Nadella said it was important to do both on a continuous basis — and not to plan and execute on episodic bursts. "You can only succeed if you plan all the time and are able to change the plan as it needs to be changed," he said.

The same is true for execution. On that front, Nadella pointed to the recent product launches and announcements, including Office for iPad.

Finally, Nadella discussed his role in reviewing the current business. "As a leadership team, I feel we have picked up the pace of asking the hard questions so that we can realistically evaluate our business," he said.

Ultimately, Nadella said, he wants to be accountable to investors, his team and Microsoft's customers — because "at the end of the day, that's what matters."

Satya Nadella’s life before Microsoft

Nadella, 46, was born in Hyderabad, India. Growing up, playing cricket was his “passion,” and he played it competitively as a member of his school’s team. “I think playing cricket taught me more about

working in teams and leadership that has stayed with me throughout my career.”Nadella “always wanted to build things,” he says. He knew that computer science was what he wanted to pursue. But that emphasis was not available when he attended Mangalore University in India, where he got a bachelor’s degree in electrical engineering. “And so it was a great way for me to go discover what turned out to become a passion,” he says.He went on to earn a master's degree in computer science from the University of Wisconsin – Milwaukee, then a master’s degree in business administration from the University of Chicago.“I’m a learner,” Nadella says. “I think the thing that I realized is, what excites me is that I'm learning something. I can learn something about some area. I can learn something from people. I can learn something from doing things differently. And I admire that in other people, too. I fundamentally believe that if you are not learning new things … you stop doing great and useful things. So family, curiosity and hunger for knowledge all define me.”He often signs up for online courses, “just crazy ambitions in the 15 minutes I have in the morning. You know, I'm trying to listen to a neuroscience class or something. I kind of ask myself, why are you doing it? But I love it.”He started his career as a member of the technology staff at Sun Microsystems. In 1992, he joined Microsoft. He was on his way to get a master’s degree in business when the Microsoft job offer came. The company was building an operating system that ultimately would be known as Windows NT, and needed team members who understood UNIX and 32-bit operating systems, he says. Nadella wanted to complete his master’s degree and take the Microsoft job. He did both.“I used to fly to Chicago Friday nights, attend classes Saturdays and come back to Redmond to work during the week.” It took him two-and-a-half years, but he finished his master’s degree.Microsoft’s new CEO finds relaxation by reading poetry, in all forms and by poets who are both Indian and American. “It’s like code,” he says. “You’re trying to take something that can be described in many, many sentences and pages of prose, but you can convert it into a

couple lines of poetry and you still get the essence, so it’s that compression.” Indeed, he says, the best code is poetry.He also enjoys watching Test cricket, “which is the longest form of any sport in the world,” with games that can go for days and days. “I love it,” he says. “There’s so many subplots in it, it’s like reading a Russian novel.”

I marvel every day at how people can excel - and that’s what really

gets me going.

Thought of Satya Nadella

With a perspective based on more than two decades at Microsoft as someone who pushed to make dynamic changes happen, both in the

company’s products and its culture, Satya Nadella says he is both “honored and humbled” to succeed Bill Gates and Steve Ballmer as the third CEO of Microsoft.“Our industry does not respect tradition - it only respects innovation,” he says. “The opportunity ahead for Microsoft is vast, but to seize it, we must move faster, focus and continue to transform. I see a big part of my job as accelerating our ability to bring innovative products to our customers more quickly.”

Our industry does not respect tradition - it only respects innovation

BIBILOGRAPHY

www.online.wsj.com/news/articles

www.businessnews.com

www.microsoft.com/news

DECLARATION

I hereby declare that the work incorporated in the present research project entitled: “Ceo change in Microsoft” is my own work and is original in nature. This work (in part or in full) has not been submitted to any university for award of a degree or diploma.

Satyanarayan joshi