Snowflake CEO Frank Slootman stepping down -- and Wall St hates it

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Apparently Frank Slootman, the veteran tech executive, was popular with investors, at least judging from their reaction that he will be stepping down as CEO of Snowflake. The company stock price has plunged more than 20% in after-hours trading on the news.

Slootman will retreat into the role of chairman of the board, while Sridhar Ramaswamy, former head of Google Ads, who came to the company when it bought AI search engine Neeva last year, will take over as chief executive.

Constellation Research analyst Holger Mueller says Slootman was always a short-term solution. "He was always going to be a transition CEO, getting Snowflake ready for IPO, taking them public and then moving on," Mueller told TechCrunch. "What Snowflake now needs is a CEO who can navigate the difficult architecture challenges that are ahead for any data vendor in the AI era."

He believes that Ramaswamy is that person. "He is more technical and has solved big problems with Neeva. It's a switch from business to technical leadership, but he has enough business acumen too," he said.

Lost in today’s executive shuffle was the company’s earnings. It reported revenue of $738 million, up a healthy 33% year over year with guidance for the next quarter of between $745 and $750 million, with growth of 26-27%.

Slootman came on board in 2019, taking over for veteran executive Bob Muglia, and was charged with taking the company public the following year. Over the last year, the stock has done well, up around 50% (the exact amount is hard to tell with this afternoon’s downward spiral), as many tech stocks recovered from 2022 doldrums.

He was famously well-compensated, with a base salary of $375,000 and a rather attractive stock option. In fact, Fortune reported that the chief executive was making an eye-popping $95 million a month at one point.

He raised eyebrows in 2021 when he told a reporter that diversity shouldn’t override merit, suggesting perhaps that you couldn't have both. That raised some hackles, and he eventually walked back those comments after a negative reaction from industry peers.

Prior to coming to Snowflake, he spent six years as chairman and CEO at ServiceNow. With all that cash, perhaps he’ll retire and enjoy his money.