Microsoft names Nadella as chairman, rewards him for refocusing company

Microsoft Corp. named Chief Executive Officer Satya Nadella as board chairman, strengthening his influence at the world’s largest software maker after more than seven years as the top executive.

Nadella, 53, succeeds John Thompson, who will return to the role of lead independent director, a position he held before being named chairman in 2014, Microsoft said Wednesday in a statement.

The change is a vote of confidence in Nadella, who was appointed CEO in February 2014. Thompson, 72, has been scaling back his work as chairman over the past few years, Microsoft said. The two have been discussing the new roles since last fall.

When Nadella took the CEO job, Bill Gates stepped down as chairman of the company he co-founded, significantly reducing his role at Microsoft, and Thompson was tapped to replace him. The idea was that Nadella would benefit from mentoring by Thompson, a technology executive for several decades.

Microsoft has undergone a rebirth during Nadella’s leadership, recovering from failures in the mobile phone and internet search market, as well as a waning of the importance of its flagship Windows operating system. Nadella has refocused the company around cloud computing, mobile applications and artificial intelligence while breathing new life into the Office software franchise by shifting it more to the cloud and to other operating systems.

The company’s shares have soared more than sevenfold and its market value is approaching $2 trillion as Microsoft has been restored to the ranks of the top technology companies.

Nadella, the company’s third CEO, will also be the third chairman in Microsoft’s history, following Gates and Thompson. Steve Ballmer, the CEO before Nadella, never held the chairmanship as Gates kept that title for Ballmer’s entire tenure.

Thompson will remain active as lead independent director, overseeing Nadella’s compensation, succession planning, governance and board operations, Microsoft said in the statement.