After co-founding audio streaming service Spotify and serving as its CEO for nearly two decades, Daniel Ek, 42, announced plans on Tuesday to step down from the CEO role.
Spotify revealed that Ek will transition to the position of Executive Chairman, effective January 1. As part of his new title, he will determine money allocation, plan Spotify’s long-term strategy, and provide the senior leadership team with support and guidance.
Alex Norström, Spotify’s co-President and Chief Business Officer, and Gustav Söderström, co-President and Chief Product and Technology Officer, will both become co-CEOs of the company on January 1. Each of them has more than 15 years of experience at Spotify.
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They will report to Ek and also serve on Spotify’s Board of Directors.
Ek stated that the change will “match titles to how we already operate.” He explained that in recent years, he has given Norström and Söderström more responsibility for the day-to-day running of the company, as he focuses on high-level decisions.
“Over the last few years, I’ve turned over a large part of the day-to-day management and strategic direction of Spotify to Alex and Gustav — who have shaped the company from our earliest days and are now more than ready to guide our next phase,” Ek said in a press release.
In a note to staff, Ek explained that “very little will change” for “most” employees; what is actually changing is his own “time and focus.” Ek wrote in the note that the CEO change was happening now because Norström and Söderström have “clearly demonstrated” that they are now ready to lead Spotify.
“To be clear, I’m not leaving,” Ek stated in the note. “I’ll remain deeply involved in the big, defining decisions about our future, partnering with Gustav and Alex as they lead the way forward.”
The co-CEOs will oversee a company with a robust user base. Ek said in the press release that Spotify had more than 700 million users, up from the 678 million monthly active users reported in the first quarter of the year.
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Ek founded Spotify in 2006 with fellow co-founder Martin Lorentzon, launching the music streaming service to the public two years later. The two aimed to transform the music industry by providing access to all music in a library for a fixed monthly fee, challenging Apple’s model of allowing users to purchase individual songs at a time. Apple launched its own competing music streaming service in 2015.
In recent years, Spotify has branched out, introducing podcasts in 2015 and audiobooks in 2022. It announced its first full year of profitability in 2024, closing the year with 1.14 billion euros (or $1.34 billion) in net income. The streaming giant then swung back to posting a loss in the second quarter of this year, reporting a net loss of 86 million euros (about $100 million), primarily due to higher personnel costs and declines in ad revenue.
Most of Ek’s $9.83 billion net worth is tied to his 6.2% ownership of Spotify, according to the Bloomberg Billionaires Index. The music streaming company, which listed on the New York Stock Exchange in 2018, has seen its stock rise by over 87% over the past year.
Spotify’s upcoming co-CEO arrangement is rare — less than 5% of major public companies have such a structure, the most notable being Netflix and Oracle. Netflix named Ted Sarandos and Greg Peters as co-CEOs in 2023, while Oracle appointed Clay Magouyrk and Mike Sicilia as its co-CEOs earlier this month.