Shareholders meeting spotlights the new Microsoft
New leadership talks about cloud computing, the upcoming Windows 10 operating system and the push for more diversity in the company.
Seattle Times technology reporter
Microsoft’s changing of the guard held the spotlight at the company’s shareholders meeting Wednesday.
Chief Executive Satya Nadella and Chairman John Thompson oversaw a largely scripted affair touting the company’s progress in cloud computing, hopes for the Windows 10 operating system, and efforts to create a more inclusive company.
Steve Ballmer, used to spending his time on stage during his 14 years as chief executive, was seated in the second row, firmly in his new role as the company’s largest individual shareholder and National Basketball Association team owner. Former Chairman Bill Gates was absent because of illness, Thompson told a shareholder after the meeting.
And many of the questions from the audience involved issues of diversity and access to technology, rather than Microsoft’s no-longer stagnant share price.
Investors have largely bought into Microsoft’s pivot in strategy under its new leadership, sentiment typified by a shareholder who took to the microphone to thank the board for “reinventing Microsoft” before asking a question. The company’s shares hit a 14-year peak last month.
Nadella on Wednesday reiterated his view that Microsoft should follow consumers beyond the company’s Windows flagship, emphasizing mobile devices and cloud computing.
During Nadella’s nearly 10-month tenure, Microsoft has taken steps that some observers said were unlikely to have occurred under Ballmer — including allowing free versions of its Office suite on devices made by competitors and permitting developers to have access to portions of the code behind a key software-development platform.
“We’re making smart and disciplined decisions,” Nadella said. “And most importantly, we’re taking bold action to step forward.”
The Rev. Jesse Jackson, who met with Nadella and other Microsoft officials on Monday, encouraged Microsoft at the meeting to disclose more diversity data and broaden the makeup of its ranks.
Nadella was roundly criticized for comments in October that women don’t have to ask for raises and should have faith in the system. On Wednesday, he was careful to emphasize the company is pushing to be more inclusive.
“Diversity and inclusiveness is a critical topic for our time, for our industry, for Microsoft,” Nadella said. “It’s great to have a candid conversation about it, but most importantly robust actions.”
Nadella said Microsoft would disclose the diversity data the company reports to the federal government by the end of the month, which drew scattered applause from the audience.
During a 45-minute question-and-answer session, shareholders also pressed for details on how the company was working to promote diversity’s benefits to the rest of the industry, and how Microsoft could better serve the elderly and the blind.
The brief business portion of the meeting was a mixed bag for Microsoft.
Members of the board were each elected with the support of more than 92 percent of votes. A shareholder proposal to increase the ability of investors to nominate board candidates, which the board opposed, was easily defeated.
Microsoft received something of a rebuke on executive pay, however.
Shareholder advisory firm Institutional Shareholder Services had recommended last month that investors vote down Microsoft’s pay package because of the size of a long-term stock grant to Nadella. ISS pegged his total compensation last year at $90.8 million.
Microsoft said 72 percent of votes backed its pay plan.
The referendum on pay, required by the Dodd-Frank financial reform act, is symbolic and typically a rubber-stamp affair.
More than 95 percent of voters approved or abstained on Microsoft’s prior pay package, ISS said, and technology firms last year saw their compensation approved by an average 88 percent of votes, according to technology-compensation consulting firm Radford, a unit of Aon Hewitt.
Thompson, in a letter to shareholders, said the payment was designed to align Nadella’s interest with Microsoft and its investors.
“I think the approval speaks to some general discontent with the ‘big number’ around Nadella’s pay, although the fact that it passed is the key, especially in a banner year for Microsoft’s stock and Nadella’s first year as CEO,” said Daniel Ives, an analyst with FBR Capital Markets.
Microsoft holds dividend steady
Microsoft’s board Wednesday declared a cash dividend of 31 cents, the second straight quarterly dividend at that figure. It will be paid March 12 to shareholders as of Feb. 19.
The board also amended its corporate-governance guidelines “to make clear its commitment to diversity on the board by actively seeking out highly qualified women and individuals from minority groups to include in the pool from which board nominees are selected,” the company said.
The Rev. Jesse Jackson, on a tour of sorts of tech shareholder meetings to push for greater opportunities for women and minorities, spoke in favor of such a policy at the Microsoft meeting.
Matt Day: 206-464-2420 or email@example.com. On twitter: @mattmday