Bill Gates is reportedly under pressure from investors to relinquish his role as chairman of Microsoft, the software company he founded 38 years ago.
According to sources reporting to Reuters, three of Microsoft’s top 20 investors have raised concerns that Gates’ declining shareholding in the company is disproportionate to the amount of power he wields as chairman.
Gates currently stands as Microsoft’s largest individual shareholder, owning around 4.5 per cent of the $277 billion (£170.8 billion) software giant. Whilst the three investors lobbying for his departure wish for their identities to remain secret, insiders report that in comparison they own five per cent of the company’s stock collectively.
Selling around 80 million Microsoft shares a year under a pre-set plan, these investors are concerned that Gates’ declining shareholding will leave him with no financial stake in the company despite a continued, weighty influence as chairman. Indeed, in the wake of Steve Ballmer’s retirement from the position of CEO (enacted during a tearful company speech complete with a Dirty Dancing soundtrack), they are worried that Gates may limit the power of a new CEO wishing to make significant changes as Ballmer’s successor.
Ballmer has faced much criticism since taking up the mantle of CEO in 2000 by those who felt Microsoft’s performance and share price could be improved, but this is the first time that Gates - widely regarded as one of technology’s greatest pioneers – has been confronted with similar pressure.
Despite difficulties, including a declining interest in personal computers due to a growing fascination with smartphones and tablets, Microsoft remains one of the world’s most valuable technology companies. It made a net profit of $22 billion (£13.6 billion) last fiscal year and the company’s board has stated that Ballmer’s strategies will be carried forward by the new CEO, including making devices such as the Surface tablet, the Xbox and key Internet services.
Some investors, however, say that Ballmer’s replacement should not be bound by such ideas, and the news that some investors were calling for Gates’ resignation has provoked mixed reactions
“I’ve thought that the company has been missing a technology visionary”, said senior analyst at Fort Pitt Capital group, Kim Caughey Forrest, claiming that Gates could play a larger role. “Bill would fit the bill”
Todd Lowenstein, however, a portfolio manager at HighMark Capital Management disagreed, arguing, “This is long overdue. Replacing the old guard with some fresh eyes can provide the oxygen needed to properly evaluate their corporate strategy.”