ServiceNow shares dramatically cut losses after plunging on CEO change

Key Points
  • "I'm super excited about our leadership team," says incoming ServiceNow CEO Bill McDermott, who recently stepped down at SAP.
  • One of the challenges McDermott faces right away at ServiceNow is filling the chief financial officer post.
  • "We have our pick of the litter," says McDermott, adding that "three serious candidates" are being considered for the job.
Incoming ServiceNow CEO Bill McDermott on his plans for the company

Shares of ServiceNow dropped 5% at Wednesday's open on Wall Street. While still a sizable decline, the stock had been down as much as 15% in after-hours trading Tuesday after the enterprise software company said its CEO, John Donahoe, was leaving to become chief executive of Nike.

Donahoe, already a Nike board member, will succeed longtime Nike CEO Mark Parker. Nike said late Tuesday that Parker will step down, effective in January of next year. Donahoe, chairman of PayPal, was formerly CEO of eBay.

For its part, California-based ServiceNow announced that Bill McDermott, who recently departed as leader of German software firm SAP, will take over for Donahoe as its CEO.

"We have a fired up team," McDermott said on CNBC's "Squawk on the Street," before the opening bell Wednesday. "I'm super excited about our leadership team. The board of directors here is so uplifting."

McDermott, 58, spent 17 years at SAP and became co-CEO in 2010. He became sole CEO in 2014.

Asked why he wanted to take a CEO job so soon after SAP, McDermott said, "I'm not the guy who wants to make a tee time," stressing he would rather be helping ServiceNow build its business than spending his time playing golf.

One of the challenges McDermott faces right away at ServiceNow is filling the chief financial officer post, vacated by Mike Scarpelli in August.

McDermott said he's not worried about finding a top-notch CFO, saying he's been getting tons of emails. "We have our pick of the litter," he said. There are "three serious candidates" being considered for the job, he added.

In addition to announcing the CEO change, ServiceNow late Tuesday also disclosed preliminary third-quarter revenue of $885.8 million, slightly more than analysts had expected. ServiceNow is set to release full Q3 results after the closing bell on Wednesday.