In an unexpected turn of events, cloud-computing firm Rackspace Hosting Inc. said Monday that CEO Lanham Napier is retiring.
Napier will be replaced on an interim basis by Rackspace co-founder and board executive chairman, Graham Weston.
The company’s stock dropped sharply after the news broke, falling by 10 percent during after hours trading.
“It has been a privilege to be part of Rackspace for the past 14 years,” Napier said in a statement provided by the company. “My choice to step down as CEO was a difficult one, but it’s the right choice for me and the company.”
He will also be stepping down from the company’s board of directors.
Napier told Wall Street analysts Monday he was leaving the company so he could focus on other interests that had fallen by the wayside as he ran Rackspace.
The company’s statement said he plans to “invest in and advise other entrepreneurial companies following a decision to step away (from Rackspace).”
Rackspace added that Napier would remain as a consultant to assist with the transition.
“Under (Napier)’s leadership, Rackspace grew from a small startup to a global $1.5 billion public company,” said James Bishkin, a company director, in a statement. “We are grateful for the way (Napier) positioned Rackpsace for continuing success.”
Rackspace’s board has begun a comprehensive search to find a long-term CEO for the company.
“We’re not in a hurry to find a successor to Lanham,” Weston said. “I really don’t expect to make an announcement anytime soon.”
Weston told Wall Street analysts that Napier’s exit does not portend major changes to the company’s game plan.
“Expect continuation of the strategy we’ve had in this place last year,” Weston said.
This is the second major change to Rackspace’s leadership in the last month. The company named Taylor Rhodes as the company’s new president in January. Rhodes replaced Lew Moorman, who announced in July he would be stepping down so he could spend more time with his sick wife and daughter.