Gates, Ballmer seek re-election to Microsoft board

SEATTLE Thu Oct 3, 2013 7:37pm EDT

Microsoft Chairman Bill Gates and CEO Steve Ballmer take questions from shareholders during the Microsoft annual shareholders meeting in Bellevue, Washington, November 19, 2008. REUTERS/Marcus R. Donner

Microsoft Chairman Bill Gates and CEO Steve Ballmer take questions from shareholders during the Microsoft annual shareholders meeting in Bellevue, Washington, November 19, 2008.

Credit: Reuters/Marcus R. Donner

Related Topics

SEATTLE (Reuters) - Chairman Bill Gates and retiring Chief Executive Steve Ballmer are standing for re-election to Microsoft Corp's board of directors, despite recent moves by some investors to reduce their influence, according to the software company's annual proxy filing made public on Thursday.

Ballmer and Gates, both 57, have been the target of activist investors who believe Microsoft needs new leadership to transform itself and compete with mobile-savvy rivals such as Apple Inc and Google Inc.

Ballmer announced his plan to retire within 12 months in August, but there is no sign Gates will relinquish his role or leave the board of the company he co-founded with Paul Allen 38 years ago.

This week, Reuters reported that three of Microsoft's top 20 investors have lobbied the board to press for Gates to step down, believing he stands in the way of fundamental change at the company. The company declined comment.

It is highly likely both Gates and Ballmer will be re-elected by shareholders at the annual meeting on November 19.

Microsoft has not yet named a successor to Ballmer and is in the midst of a search it said could take until next August. Ballmer is set to stay on as CEO until a successor is appointed, but Microsoft has not said whether Ballmer will remain a board director after that.

On the board or not, however, Ballmer made it clear in a meeting with Wall Street analysts last month that he plans to remain engaged as a major investor.

According to the proxy filing, Gates remains the company's largest individual shareholder, with a 4.5 percent stake, followed by Ballmer with 4 percent. Ballmer will eclipse Gates as the largest individual shareholder next spring if Gates continues to sell 20 million shares a quarter, as he has for most of the last decade.

The filing made no mention of Mason Morfit, president of activist shareholder ValueAct Capital Management, who was offered a board seat by Microsoft in August.

Morfit is expected to take up that offer and will likely be appointed to the board after Microsoft's annual shareholder meeting, people familiar with the matter said.

Ballmer, who faced years of investor criticism during his 13-year tenure, received a smaller bonus for fiscal0 2013, his last full year as CEO.

He received a $550,000 bonus, on top of his $697,500 salary, which was 79 percent of what Microsoft called his "target" bonus and 11 percent less than his $620,000 bonus the year before.

The board's evaluation of Ballmer recognized the company's record $78 billion revenue last fiscal year, but faulted Ballmer for the decline in profit from its Windows unit and the poor reception of Microsoft's Surface RT tablet, which resulted in a $900 million charge for unsold inventory.

(Reporting by Bill Rigby; Editing by Cynthia Osterman and Andre Grenon)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (3)
tjordanchat wrote:
Microsoft will not change as long as Gates is in charge. Blame it on hubris.

Oct 04, 2013 6:33am EDT  --  Report as abuse
tatrover wrote:
#tjordanchat Gates is the founder of Microsoft. Thoses seeking change should either go and start their own company and build it up, sell up their shares, or tow the line. Noone will want anyone else to come and tell them what to do in their home. Gates is no different

Oct 04, 2013 9:24am EDT  --  Report as abuse
kbill wrote:
Corporations, including Microsoft and Apple, are mortal; they are organic; they have an inception, a conception, a developmental time, a youthful time of young-adult energy and risk, and a middle-age in which they get fat around the middle and lose focus on their “youthful” ideals in a culture which accepts less than perfect results from a “team” which has lost intra-team competitiveness.

The dying corporation “cruises” for a while, enjoying the largesse of the prior successes…and then it becomes a fixture in the industry which it used to lead and dominate…a commodity supplier, such as IBM, Texas Instruments, and H-P, old and stodgy and susceptible to their environment’s threats.

Changing the “faces” of leadership will not change the inevitable future of Microsoft or any other corporation…the change may delay a death, but it won’t restore long-term vibrancy to the corporation’s life — though it may delay a complete death in the short term.

Under acceptable (or “excellent”) leadership and management Microsoft will continue to grow through technology acquisition, relying less and less on its own in-house technological prowess, living off its aging herd of “cash cows” for example Internet Explorer, and the occasional splashy break-through acquisition…a brief reminder to the world that “We’re still here!” Gates will go off to save the world from itself…using his billions trying to rid the world of the self-imposed results of its own self-loathing, human superstition and belief’s, and Balmer will do whatever a Balmer does…few meteoric leaders possess the grace, and the good fortune of dying an early death, at the top of their game, before the well-deserved criticism of “middle age” come home to roost…Jobs was lucky…he left after Apple’s Act II.

Oct 04, 2013 2:37pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.