Qualcomm Inc, the world's biggest maker of cellphone chips, unexpectedly named Chief Operating Officer Steve Mollenkopf as chief executive on Friday, heading off the possibility he might be poached to run Microsoft Corp.
Mollenkopf had been in line to eventually succeed CEO Paul Jacobs, the 51-year-old son of a Qualcomm co-founder, but that plan was sped up in order to keep the senior executive from leaving, Jacobs told Reuters in an interview.
"Our executives are very talented and very sought after," Jacobs said, when asked by Reuters whether the promotion was related to an offer from Microsoft.
"The timing is a little faster than we originally planned but the key thing is to make sure we kept management continuity," Jacobs said.
Jacobs and Mollenkopf declined to specifically discuss Microsoft or whether Mollenkopf had a job offer from the world's largest software company, which is seeking a candidate to replace retiring CEO Steve Ballmer.
On Thursday, Bloomberg News reported that Microsoft has been considering Mollenkopf as a candidate for CEO.
"He would have been an awesome (Microsoft) CEO," said FBR analyst Chris Rolland. "But Qualcomm didn't want to lose him, and it makes sense to me."
"If I were the son of a founder of a $130 billion company, I would want to make sure I have the top guy behind me - and Steve is definitely that guy," Rolland said.
Removing Mollenkopf from the shortlist of CEO candidates at Microsoft could complicate matters for its board. The company was down to a "handful" of candidates with no clear leader, sources familiar with the matter told Reuters this week.
Mollenkopf, 44, will take the reins in March, as Qualcomm faces a shift in smartphone growth away from the United States toward China, where it faces an antitrust investigation and where consumers often spend less on their phones.
Qualcomm shares were flat at $72.73 on Nasdaq, suggesting investors saw little impact from the change.
Jacobs, who replaced his father Irwin as Qualcomm CEO in 2005, will serve as executive chairman and focus on developing new technology and long-term opportunities, the company said.
"Paul is a visionary guy and Mollenkopf really knows how to run things. So I think this division of labor makes a ton of sense, although it's a little earlier than I would have expected," said Bernstein analyst Stacy Rasgon.
Under Jacobs, Qualcomm, founded in 1985, has become the top chip supplier for smartphones and its stock value has surpassed that of Intel