Maffei Leaves, Connors Takes Over as CFO

Microsoft CFO Gregg Maffei resigned in December to become CEO of a Canadian company that builds and operates high-bandwidth fiber-optic networks. Coming on the same day that Microsoft’s market capitalization rose above US$600 billion, news of the not-unexpected departure was absorbed by the markets with barely a blip in the stock value. Maffei, 39, had won respect on Wall Street for guiding Microsoft’s stellar financial performance and his skill in closing important acquisition and investment deals. He will remain chairman of Expedia. John Connors, vice president of Microsoft’s Worldwide Enterprise Group, replaces Maffei as CFO and will also take his place on the company’s executive body, the Business Leadership Team. Connors, 40, has considerable management experience within the Finance Division.

Maffei, who became CFO in 1997, had been openly headhunted by various high-tech start-ups in 1999. In April, he was under consideration for the job of CEO at Road Runner, a broadband—cable-modem service joint venture between Time Warner and MediaOne in which Microsoft has a 10%, US$212 million stake. Because of that investment, Bill Gates was able to block the approach and retain his CFO, but it was clear that Maffei was open to new offers. According to Securities and Exchange Commission filings, Maffei sold Microsoft shares worth about US$35 million in the last two months, the first time he had sold shares since becoming CFO. The SEC filings show that this leaves Maffei with 1.71 million of the company’s stock options, of which 1.14 million may be exercised. The rest he loses on his departure. Worldwide Fiber, which is expected to go public in the first half of 2000, will compensate Maffei for the loss.