Microsoft Corp. Chief Executive Satya Nadella will also assume the role of company chairman, the software giant said Wednesday.
The move marks the second year in a row Microsoft’s board has undergone significant change after co-founder Bill Gates last year announced he was stepping down three months after having been re-elected to the board. Mr. Gates relinquished his seat after board members decided he should step down as they pursued an investigation into the billionaire’s prior romantic relationship with a female Microsoft employee that was deemed inappropriate, The Wall Street Journal reported last month.
Mr. Nadella, 53, took over as Microsoft CEO in 2014 and helped restore the software giant’s fortunes, in part by betting on the company’s cloud-computing business that has seen strong growth. He turned Microsoft into America’s second largest company by value after Apple Inc. Microsoft now has a market value of topping $1.9 trillion.
John W. Thompson, who preceded Mr. Nadella as chairman, returned to his role as lead independent director, a title he held from 2012 to 2014. He most recently served as the CEO of Virtual Instruments Corp.
Mr. Nadella and Mr. Thompson have been in talks about potentially transitioning the chairman role going back to late 2020, according to a company spokesman, who said the change was unrelated to Mr. Gates’s departure from the board. Last year’s move represented one of the biggest board departures in the tech industry since the death of longtime rival and Apple Inc. co-founder Steve Jobs.
Mr. Gates relinquished his seat after board members decided he should step down as they pursued an investigation into the billionaire’s prior romantic relationship with a female Microsoft employee that was deemed inappropriate, The Wall Street Journal reported last month.
A spokeswoman for Mr. Gates has said "There was an affair almost 20 years ago which ended amicably" and that his decision to depart the board was unrelated. At the time his departure was announced, Mr. Gates said he intended to focus more on his philanthropic efforts and was also vacating his board seat at Berkshire Hathaway Inc.
Microsoft has been one of the corporate beneficiaries of the pandemic as homebound consumers, workers and students have adopted many of its tools and its cloud-computing services have taken off. Sales linked to Microsoft’s Azure cloud services increased 50% in the latest quarter from the year prior.
Overall sales in the March quarter rose 19% to around $41.7 billion and the company posted a profit of $15.5 billion.
The company’s videogaming business also has seen rapid growth with people stuck at home while sales of its Surface laptops have jumped as well during the months of remote working and distance learning.
The pandemic has also supercharged Microsoft’s Teams workplace collaboration suite that offers features that compete with companies such as Zoom Video Communications Inc. and Slack Technologies Inc. Mr. Nadella has hailed Teams as critical to Microsoft’s future, serving as a hub for the company’s Word, Excel and PowerPoint products.
Teams usage has risen to more than 145 million active users from 20 million active users before the pandemic in November 2019, Mr. Nadella has said.
The CEO has said he expects spending on technology, currently at about 5% of gross domestic product, to continue to accelerate after the pandemic wanes. "It’s going to double in the next 10 years to 10%," he said earlier this year.
Mr. Nadella has increasingly been putting his stamp on Microsoft, including through a number of high-profile acquisitions.
In April, Microsoft said it had agreed to buy artificial intelligence company Nuance Communications Inc. for $16 billion, the latest in a string of blockbuster acquisitions for Mr. Nadella. The company, soon after Mr. Nadella took the helm, agreed to pay $2.5 billion for the owner of the Minecraft videogame, Mojang AB. The company in 2016 spent about $26 billion for professional network LinkedIn Corp. and followed that deal with the purchase two years later of code-collaboration site GitHub for $7.5 billion. Last year, Mr. Nadella tried to acquire parts of short-video app TikTok, before talks fell apart.