Microsoft's board of directors will likely re-elect Bill Gates and Steve Ballmer next month despite activist investors.
Despite recent reports that three of Microsoft's top twenty investors want Bill Gates out as Chairman of the board, the company's annual proxy filing made public on Thursday reveals that Microsoft's board of directors still want both Bill Gates and Steve Ballmer to stay. Both have been targets of activist investors who want the two out of the picture and replaced by new leadership that will supposedly better position the company in competing against Apple and Google.
Ballmer revealed his plan to retire within the next 12 months back in August. Until then, he will retain the role of CEO until a successor is appointed, possibly up until August 2014. There has been no indication that Ballmer will remain on the board once he hands over the CEO reigns, but Ballmer previously made it clear to Wall Street analysts that he will remain engaged as a major investor nonetheless.
Thursday's proxy filing reveals that Gates is still the company's largest shareholder, with a 4.5 percent stake. Ballmer follows with a 4 percent stake, but could move into the top position if Gates continues to sell 20 million shares of the company per quarter, which he has done over the last decade. Both Gates and Ballmer are expected to be re-elected by shareholders at the annual meeting on November 19.
Reuters reports that the proxy filing made no mention of Mason Morfit, president of activist shareholder ValueAct Capital Management. Morfit was offered a board seat by Microsoft in August, and sources claim that he will take up the offer and likely be appointed to the board after Microsoft's annual shareholder meeting.
Earlier this week, sources said three top Microsoft investors wanted Bill Gates out, fearing that he could block the adoption of new strategies, and limit the new CEO's power to make substantial changes. They're also reportedly worried about Gates' role on the special committee for seeking out a new CEO, and the amount of power he still wields given his declining share amount. They also point to his philanthropic foundation that consumes most of his time.
Gates owned 49 percent of Microsoft before it went public in 1986, and is now selling about 80 million Microsoft shares a year under a preset plan. By 2018, he is expected to have no financial stake in the company.