Shareholders grumbled about Microsoft’s languishing stock price at the annual shareholder meeting Tuesday morning at Bellevue’s Meydenbauer Center.
“Notwithstanding the glowing words from management, I’m very disappointed by the price of the stock,” one shareholder said. Another asked why the company did not raise the dividend more. And one shareholder asked Chairman Bill Gates why he was selling shares to raise money for the Gates Foundation instead of eliminating the shares from Microsoft’s corporate books.
“I understand the frustration,” Chief Executive Steve Ballmer said. “We’re all shareholders. Let’s talk about what we can do or what we can’t do it. Ultimately the stock market gets it right as long as we get it right.”
Gates said of the foundation, “I think the thrust of the question is, ‘Are the current grantees of the foundation more deserving than turning the money over to Microsoft shareholders?’ ” I’ve made the decision that that wealth is going to go into the foundation rather than being the reduction in the shares of Microsoft.”
Ballmer spoke for the first 15 minutes, talking up Windows, Office and spending a lot of time talking up cloud computing. The company then gave a demonstration of its new smartphone system Windows Phone 7.
“The opportunity to transform people’s lives all around the world have never been greater. The opportunities for growth and success have never been more exciting,” he said. “We’re going to work very hard every day to have a positive impact.”
A shareholder also asked whether Microsoft should break up the company, which had been suggested in a recent report by Goldman Sachs.
“I obviously don’t think it is time. I don’t think it would be useful. I think it creates economic dissynergies in fact,” Ballmer said.
Gates also said it was a bad idea. “I don’t think there’ a line where you create net simplicity by trying to create a new company.”
It was noteworthy that Ballmer highlighted Gates’ continued work with the company as an adviser to specific projects, as there was clearly still a lot of love for Gates in the shareholders meeting, which drew about 1,000 people. Ballmer said Gates was not just an adviser on the board but an adviser “on some key projects.”
Here are the three matters voted on at the meeting:
— All nine directors nominated were elected, with more than 94 percent of the votes cast: CEO Ballmer, Chairman Gates, Dina Dublon, Raymond Gilmartin, Reed Hastings, Maria Klawe, David Marquardt, Charles Noski and Helmut Panke.
— Deloitte and Touche was approved as the independent auditor.
— A shareholder proposal to set up a board committee for environmental sustainability failed. Harrington Investments, a small firm in Napa Valley, supported establishing the committee. “It’s extremely important that the directors recognize that sustainability and environmental sustainability is a criteria for just about any publicly traded company in the globe,” John Harrington said at the meeting. He also said Intel had adopted a similar committee. The Microsoft board recommended rejecting the proposal, saying the company already built environmental values into the organization.