Microsoft shares soared as much as 10 percent on Friday after Chief Executive Steve Ballmer announced he would retire within the next 12 months.
The market's gleeful reaction to the news may have put a dent in Ballmer's oversized ego, but the fact he made $1 billion, at least on paper, for quitting should ease any hurt feelings.
Ballmer holds 333 million Microsoft shares and based on the share price jump at the opening bell, his already huge personal fortune increased by $1 billion, Forbes reported.
Shares have retreated from their morning highs, but Ballmer and his Microsoft colleagues still stand to make a lot of money from his retirement. This may be bittersweet news for other longtime shareholders who have watched their shares fall 36 percent since Ballmer took over as CEO in 2000.
Investors and analysts have been calling for Ballmer’s ouster for years as the software company failed to adapt to the changing technology and keep up with faster-moving rivals.
“Under his leadership, the company has failed to capitalize on some of the most important tectonic shifts in technology, including the rise of mobile devices and Internet search,” The New York Times said in a blunt assessment of Ballmer’s performance.
“Mr. Ballmer has watched as Apple, an old nemesis that nearly went bankrupt in the late 1990s, and Google, which didn’t even exist until then, have soared.”
Ballmer, 57, joined Microsoft in 1980 and replaced co-founder Bill Gates as chief executive in 2000.
Friday’s bombshell came less than two months after Microsoft announcement a huge company-wide reorganization aimed at creating a structure that fosters teamwork across divisions, rather than internal competition.
In his statement, Ballmer said Microsoft was heading in a “new direction” and needed a CEO who would be there for the long term.
"There is never a perfect time for this type of transition, but now is the right time,” Ballmer said.
Ballmer will continue in his role until a successor is found.
Microsoft shares were up 7.4 percent at $34.80 in late afternoon trade.
While his departure has been universally welcomed, Microsoft watchers will miss those entertaining Ballmer moments such as this one during a presentaton in 2000, the year he took the helm of the company.