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March 21, 2014

Comings & Goings: Seagate's CEO Stephen Luczo Shuts Down His Position on Microsoft's Board of Directors

While the recent search for a new CEO at Microsoft (News - Alert) has been a long and often complex process—complete with a whole lot of outside viewers wondering just what Microsoft was thinking much of the time—its recent conclusion has not only brought the company a new CEO in the form of Satya Nadella, but it has also brought with it a departure, as Seagate (News - Alert)'s CEO Stephen Luczo has stepped down from his position on Microsoft's board of directors.

Luczo noted that, since the CEO search was now complete, and by all reports Nadella was off to a good strong start, it was a good time for Luczo to step down so he could put further effort into the operations of Seagate, a point that Luczo noted he was planning to “turn (his) full attention to.” This isn't the first major move the Microsoft board has seen lately, however; not only did Bill Gates (News - Alert) recently resign his own chairman position—though he's still, at last report, on the board of directors—Nadella also gained a seat on the board, and the board also brought on another member in ValueAct's president Mason Morfit. For the time being, former CEO Steve Ballmer (News - Alert) also has a slot on the board of directors. Further change came in as Microsoft put Stephen Elop in the top slot handling Xbox affairs.

The Luczo resignation comes at something of an unexpected time, when Microsoft stock has—for the first time since 2000, at last report—closed at above $40 a share, though some note that stock splits had a hand in that pricing. Still, with Microsoft stock at the highest price it's been in better than a decade by some charts, it's enough to maybe wonder why the board seems to be in such flux.

Microsoft's recent successes are likely driving some of those gains—the rise of Microsoft Lync, for example, or the ongoing success of Skype (News - Alert), Xbox, and several other Microsoft properties certainly doesn't hurt the stock value—and though the search for a new CEO took a lot of time and some strange twists, it could easily be explained away as Microsoft simply taking its time and looking for the best possible entrant into the position. But the combination of a lengthy CEO search coupled with a lot of entrances and exits on the board may serve a counter-purpose, putting a bit of scare into some investors who were hoping that Microsoft would stay the course that was so clearly turning the stock price around over the last several years. The stock has been on an upward track—with some plateaus and a couple valleys—since about 2009 by some charts, so to suggest that a lot of changes now might well unnerve investors really isn't out of line.

Only time will tell how the markets take all this musical-chairs action in the Microsoft boardroom, but from the look of things so far, shares are holding out and investors seem at least reasonably confident that Microsoft can keep going in this age when the PC has so much less sway than it once did. Still, things can—and often do—change rapidly when stock prices get involved, and the end result may be one that Microsoft won't like at all.

Edited by Cassandra Tucker

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