Microsoft Investors Going After Gates to Resign

Microsoft Corp. investors aren’t satisfied with the pending retirement of CEO . A group of investors that holds a collective 5 percent of Microsoft stock are reportedly pressuring founder Bill Gates to resign his chairmanship.

Gates, who retired as CEO in 2000, remains the chairman of the board and is Microsoft’s single largest shareholder. He and fellow board member, Virtual Instruments CEO John Thompson, are overseeing the CEO replacement search.

According to Reuters, three investors who hold a large block of Microsoft stock are lobbying other board members to pressure Gates into full retirement. The alternate course of action they want is a CEO that isn’t a Ballmer clone and will focus on restoring value and growth to Microsoft.

A hallmark of the Ballmer era is high revenue growth, but low stock performance. Since taking over as CEO in 2000, Microsoft’s revenues have soared as it pressed into business applications, infrastructure and consumer products. However, Microsoft’s valuation — the total value of its outstanding stock — fell from above $600 billion to approximately $277 billion today.

The stock market and channel partners cheered the retirement of Ballmer. On the day of the announcement, Microsoft’s stock price jumped 10 percent. This signaled the market endorsed a change to revamp Microsoft.

Microsoft has grown under Ballmer, but has fallen behind on several key trends, most notably mobility, tablets and operating systems. While Microsoft continues to play catch-up, Google Inc. and Apple Inc. have divided the world in smartphones and tablets.

Microsoft investors have long complained about the company’s stock not performing and management hording billions of dollars in cash. Some investors have even advocated breaking up the company into its constituent divisions.

A push to oust Gates from the board’s chairmanship could signal Microsoft is in for internal discord as it tries to shape its future. It could also signal a period of instability and uncertainty for channel partners reliant on Microsoft’s products and support.

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