Snowflake Chairman Frank Slotman attends the Snowflake 2022 Summit in Las Vegas on June 14, 2022.

Snowflake | Via Reuters

News from Snowflake The retirement of CEO Frank Slootman sent the company’s shares tumbling 18% on Thursday, their sharpest selloff since the data analytics software provider debuted on the New York Stock Exchange in 2020.

Slootman’s departure was announced late Wednesday as part of Snowflake’s quarterly earnings report, which included disappointing guidance. Analysts at Mizuho Securities wrote in a note that shares were falling “as investors digested the resignation” of Slootman, who joined in 2019 and led the company through its blockbuster IPO the following year.

Although the announcement sent shockwaves through Wall Street, Slootman told CNBC he’s not worried about a wave of Snowflake employees following him out the door.

“It’s not a personal cult, is it?” Slotman said.

Slotman, 65, succeeds former Google advertising chief Sridhar Ramaswamy, who joined Snowflake in June through the company’s $185 million purchase of Neeva, a startup founded by Ramaswamy in 2019.

Snowflake was the third enterprise technology company Slootman took through the IPO process, following Data Domain in 2007 and ServiceNow in 2012, Snowflake saw his biggest financial gain. He controlled roughly 6% of the company’s stock at the time of the IPO and owned 10.6 million shares as of Feb. 9, a stake currently worth about $2 billion.

In addition, Slootman’s total compensation in 2023 was $23.7 million, almost entirely from stock and option awards.

Prior to joining Snowflake, Slootman spent approximately six years as CEO of ServiceNow. He told CNBC that ServiceNow continues to thrive after his departure. Annual revenue has grown from $1.5 billion to nearly $10 billion.

“Some people are still there that I hired — quite a few of them, actually,” Slotman said. “Obviously there are new ones as well.”

ServiceNow’s workforce totals 23,668 by the end of 2023, up from 603 in December 2011, months after Slootman joined, according to regulatory filings.

“We’ve got ServiceNow back on track. We did that with Snowflake as well,” said Slotman, who remains as chairman.

Taking three companies through major and successful exits is a rare feat in tech and has earned Slootman a lot of recognition. But he also drew attention for wading into controversy over issues like the tech industry’s focus on diversity. In 2021, as corporate America navigated the aftermath of George Floyd’s murder, Slootman noted that diversity should not trump merit. He later apologize.

In his 2022 book Amp It Up, Slotman offers advice to leaders on how to raise standards in companies, citing Steve Jobs’ insistence on greatness in An apple. “Don’t let the malaise set in,” he wrote.

Founded in 2012, Snowflake built a cloud-based data warehouse for enterprise information storage and analysis. Now the company wants to help customers build AI models and applications on the data.

Ramaswamy said Snowflake has a clear vision, with the data cloud at the center and the applications around it.

“What I plan to do is to achieve this at scale and speed,” he said.

The challenge will be to maintain the company’s momentum.

Snowflake generates about $3 billion in annual revenue, growing about 32% annually, compared with less than $200 million before Slootman replaced the former Microsoft executive Bob Muglia as CEO in 2019. As it tries to continue its rapid growth, Snowflake faces competition from Databricks, valued at 43 billion dollars last year in an investment round that included Capital One, which previously supported Snowflake.

After Snowflake bought Neeva, Slootman said he made an effort to get to know Ramaswamy. The company placed Ramaswamy in its most important role at the time, leading its AI efforts. Slootman understood.

“For God’s sake…, this is the opportunity we’ve been waiting for,” he said.

Ramaswamy said he spends a lot of time with Slotman. They have traveled together to London and Berlin, along with domestic trips to Arizona and Las Vegas. Ramaswamy said he has had conversations with more than 100 clients, including many with Slootman.

Now that he is at the helm, Ramaswamy has to deal with naysayers.

“It is undoubtedly troubling to see Mr. Slotman, who has a solid track record and is well regarded by investors, step down after five years in the role,” Deutsche Bank analysts wrote in a note on Thursday, although they maintained their buy rating on the shares.

But no one has a bigger stake in Ramaswamy’s success than Slootman, who remains one of the biggest investors in the company.

“Snowflake is in an extremely good place with Sridhar at the helm,” he said.

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