Three of Microsoft's top shareholders—representing some 5 percent of the company's outstanding shares—want company cofounder Bill Gates to step down as chairman. In an exclusive report, Reuters said that Mr. Gates's presence at the head of Big Redmond's board will inhibit the adoption of new strategies and products and limit the power of the company's next CEO to make changes.
The Man, the Myth, the Legend
Bill Gates is enormously well respected by most of the world. Today he is the head of the Bill and Melinda Gates Foundation, a US$38 billion charity that is tackling some of the world's biggest problems and making headway against several of them.
He earned a vast personal fortune founding and leading Microsoft into a corporate hegemony that utterly controlled the PC industry for decades. Under his stewardship, Microsoft ruthlessly went after competitors using a variety of brilliant—if sometimes illegal—methods to turn Windows and Office into cash cows that were the envy of the world...
...until Apple came and upset the apple cart in mobile.
He stepped down from the CEO spot at Microsoft in 2000 and handed the reins of the company to marketing man Steve Ballmer. For the last 10 years, Microsoft's stock has stood at a virtual standstill as Mr. Ballmer pursued strategies to maximize Windows and Office revenues, but failed to make an impact in any new markets (save for console gaming, where Microsoft is indeed a powerhouse).
Trouble in Paradise Redmond
Microsoft has had a series of whiffs in the mobile market, in particular—markets that Microsoft pioneered but never made mainstream, as their Windows-branded smartphones and Windows-based tablets have failed to catch on. Apple and Google/Samsung have taken Microsoft behind the bleachers, beaten it up, taken its lunch money, stepped on its lunch, and left it hanging by a corporate wedgy that's going to require a visit to a doctor.
All the while, Mr. Gates stood as Chairman of the company, effectively putting a stamp of approval on Mr. Ballmer's actions. Steve Ballmer himself announced in September that he was stepping down as CEO within 12 months, and that's apparently when the above-mentioned, but unnamed shareholders began thinking about a Microsoft without its founder, too.
The Reuters story said that it's only three of the top 20 investors who are cranky. They represent 5 percent of Microsoft's shares. That's nowhere near enough to force a change—Bill Gates himself owns 4.5 percent of the company—but it's interesting that a man whose record has largely been unassailable is getting any pressure to step down from the company he founded—a company that is still printing money.
According to the unnamed sources, the investors' concern is that Mr. Gates is selling his stock at a long-known and publicly announced clip that will see him without a stake in the company by 2018. He's selling 80 million shares per year. As such, they believe his power and influence is disproportionate to his holdings, especially considering how much time he spends on his true passion, the (frankly awesome) Bill and Melinda Gates Foundation.
They also believe he could be an impediment to Microsoft changing directions. That's a justifiable concern. Mr. Gates has long resisted any and all changes that didn't emphasize Windows, and that mindset has played a major role in the Surface debacle and Windows Phone being a non-player in the smartphone industry.
Will Mr. Gates be forced out? Not a chance. Momentum, tradition, and legacy are all on his side. Might the concerns of these investors yield some much-needed change at Microsoft? Maybe.
I certainly hope so. A healthy and vibrant Microsoft innovating and developing new technologies would be a great thing for shareholders (of which I am not one), but it would be even better for technology consumers.