Microsoft investors call for Bill Gates' departure

Sources within the company have reported that three major shareholders are worried that Gates' influence might obstruct future changes

Bill Gates is reportedly under pressure to step down as chairman of Microsoft, the company he founded 38 years ago.

Sources familiar with the matter informed Reuters that three of the software giant’s top 20 investors were concerned that Gates wields power that is disproportionate to his declining shareholding.

Although Gates remains the company’s largest single shareholder owning approximately 4.5 per cent of the $277 billion company, he sells around 80 million shares annually under a pre-arranged plan. At this current rate Gates would be left with no financial stake in the software giant by 2018.

The three investors have requested that their identity be kept secret but sources report that they collectively hold more than 5 per cent of the company’s stock.

They are worried that Gates’ position as chairman might limit the power of a new chief executive to make sweeping changes to the company.

Microsoft has begun looking for a new CEO after Steve Ballmer announced in August that he would retire from the position in 12 months’ time. Ballmer made his last company speech to over 13,000 staff last month, tearfully describing Microsoft as “the greatest company in the world.”

Ballmer has long faced pressure from investors to improve the company’s performance and share price but this is the first time that Gates has been targeted in a similar manner.

Gates acted as Microsoft CEO until he passed on the role to Ballmer in 2000, relinquishing his day-to-day duties at the company in 2008 to focus on the Bill & Melinda Gates Foundation, a philanthropic organisation with a $38 billion endowment.

Despite their apparent displeasure with Gates, the investors involved in the campaign are reportedly still keen to carry on with Ballmer’s plans to restructure the company, announced in July. Ballmer called for “one strategy, one Microsoft” with a new focus placed on services and devices.  

This strategy can be most clearly understood through the recent redesigns of Microsoft’s livery, with each of the coloured panes in the company’s logo now corresponding to a key product. Blue represents the Windows operating system; green for Xbox and Xbox Live; red has been assigned to Office, and yellow now stands for Bing.

Microsoft remains one of the world’s most valuable technology companies, reporting a net profit of $22 billion in the last fiscal year. Despite this, many analysts believe that the company failed to anticipate the swing towards mobile devices in the consumer market.

Tablets and smartphones are expected to outsell traditional PCs for the first time ever in the final quarter of 2013, though this will be due primarily to holiday shopping, with PC sales still expected to beat those of mobile devices over next year as a whole.

Microsoft’s attempts to move into the market have so far been underwhelming. The Surface range of tablets launched last year suffered a $900m writedown for unsold inventory, though the devices have been refreshed for 2013.

Microsoft’s mobile platform Windows Phone is still massively outperformed by both Android and iOS in terms of global market share, though recent figures suggest that the OS’s fortunes are on the rise.

Reaction from shareholders to the possible ousting of Gates have been mixed. Todd Lowenstein, a portfolio manager at HighMark Capital Management, which owns Microsoft shares, described it as “long overdue”, whilst Kim Caughey Forrest, a senior analyst at Fort Pitt Capital Group suggested that Gates should in fact be returned to a large role.

"I've thought that the company has been missing a technology visionary," Forrest said. "Bill (Gates) would fit the bill." This sentiment has been echoed by others including tech writer Farhad Manjoo.

Writing for The Independent and Slate, Manjoo argues that Gates should be re-appointed as CEO, saying: “Only he has the institutional authority to liberate Microsoft from the Windows/Office golden noose. Only he could outline some new plan for the firm and command the troops to get in line.”

(additional reporting by agencies)

News
people
Arts and Entertainment
Armstrong, left, and Bain's writing credits include Peep Show, Fresh Meat, and The Old Guys
TVThe pair have presented their view of 21st-century foibles in shows such as Peep Show and Fresh Meat
Arts and Entertainment
Keys to success: Andrew and Julian Lloyd Webber
arts + entsMrs Bach had too many kids to write the great man's music, says Julian Lloyd Webber
Sport
footballMan City manager would have loved to have signed Argentine
PROMOTED VIDEO
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
News
people
News
i100
Arts and Entertainment
Hand out press photograph/film still from the movie Mad Max Fury Road (Downloaded from the Warner Bro's media site/Jasin Boland/© 2014 Warner Bros. Entertainment Inc.)
films'You have to try everything and it’s all a process of elimination, but ultimately you find your path'
Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films
books

New essay by JK Rowling went live on Pottermore site on Friday

News
people

Top Gear presenter is no stranger to foot-in-mouth controversy

News
Russia Today’s new UK channel began broadcasting yesterday. Discussions so far have included why Britons see Russia as ‘the bad guy’
news

New UK station Russia Today gives a very bizarre view of Britain

Arts and Entertainment
Keira Knightley and Benedict Cumberbatch at the premiere of The Imitation Game at the BFI London Film Festival
filmsKeira Knightley tried to miss The Imitation Game premiere to watch Bake Off
News
i100
Sport
Enner Valencia
footballStriker has enjoyed a rapid rise to fame via winning the title with ‘The Blue Ballet’ in Ecuador
Arts and Entertainment
A top literary agent has compared online giant Amazon to Isis
arts + entsAndrew Wylie has pulled no punches in criticism of Amazon
Arts and Entertainment
Charlie Sheen said he would
tv

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Trainee Recruitment Consultant - SThree Group - Bristol

    £18000 - £23000 per annum + Uncapped Commission: SThree: SThree Group has been...

    Trainee Recruitment Consultant - Real Staffing - Leeds - £18k+

    £18000 - £27000 per annum + Commission: SThree: The SThree group is a world le...

    Senior Automation Tester – Permanent – West Sussex – Circa £40k

    £35000 - £40000 Per Annum plus excellent benefits: Clearwater People Solutions...

    Trainee Recruitment Consultants

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    Day In a Page

    Bryan Adams' heartstopping images of wounded British soldiers to go on show at Somerset House

    Bryan Adams' images of wounded soldiers

    Taken over the course of four years, Adams' portraits are an astonishing document of the aftermath of war
    The drugs revolution starts now as MPs agree its high time for change

    The drugs revolution starts now as MPs agree its high time for change

    Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
    The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

    Gotcha! The camera is turned on tabloid editors

    Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
    Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

    Fall of the Berlin Wall

    It was thanks to Gorbachev that this symbol of division fell
    Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

    What makes ouija boards and demon dolls scary?

    Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
    A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

    Rose Rouse's safari in modern Britain

    Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
    Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

    'My world of no smell and odd tastes'

    A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

    Matt Parker is proud of his square roots

    The "stand-up mathematician" is using comedy nights to preach maths to big audiences
    Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

    Paul Scholes column

    Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
    Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

    Frank Warren column

    Call me an old git, but I just can't see that there's a place for women’s boxing
    Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

    Adrian Heath's American dream...

    Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
    Simon Hart: Manchester City will rise again but they need to change their attitude

    Manchester City will rise again but they need to change their attitude

    Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
    Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

    A Syrian general speaks

    A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities