Microsoft Cheers Year of 'Solid Progress' at Shareholders Meeting
By Matt Day. Updated December 01, 2016.
Microsoft executives struck an upbeat tone at the company's annual shareholders meeting Wednesday, touting signs of success in the company's campaign to remain relevant in a fast-changing technology world with a new generation of software tools.
"This last year has been a year of solid progress at Microsoft," Chief Executive Satya Nadella [pictured here] said at the event, attended by a few hundred shareholders and company officials at Bellevue's Meydenbauer Center.
In contrast to the era in which many shareholder questions circled Microsoft's stagnant stock price, the company is set to end 2016 on a high note.
Microsoft's share price is hovering near all-time highs, aided by growth in the company's cloud-computing units. Shareholder-friendly policies, including billions of dollars paid out annually in dividends and share buybacks, have also helped buoy shares.
Shareholders voiced their approval of the company's direction in their near unanimous re-election of the board of directors. Microsoft's slate of board of directors candidates was approved with more than 98 percent of votes cast.
The board's composition last changed a year ago with the appointment of Johnson & Johnson executive Sandra Peterson, and a former Cisco executive, Padmasree Warrior.
The addition of two women to the board, replacing the retiring Maria Klawe and joining current board member and Dick's Sporting Goods Chief Financial Officer Teri List-Stoll, made Microsoft's directors a bit more diverse. But the company as a whole hasn't fared as well, recently reporting a second consecutive annual decline in the portion of women employed by the company, and muted gains in the share of underrepresented minorities.
Nadella said the company had been bringing in more diverse classes of university graduates recently, "but we need to do more, both at Microsoft and across our industry."
Shareholders also voiced approval for Microsoft's evolving executive-compensation practices, a break from past years. The company said 95 percent of shareholder votes were to approve the symbolic advisory vote on executive pay.
In each of the past two years, shareholders delivered Microsoft a rebuke on the company's pay practices, which critics said included too many giant stock grants and were only loosely connected to the company's performance. Those grants included a giant package, valued by an independent shareholder advisory firm at more than $90 million, to Nadella after he was named CEO in 2014.
Since then, Microsoft has moved to tie more of executives' pay to Microsoft's business goals and financial performance.
During a question-and-answer session at the end of the meeting, two shareholders voiced concerns about Microsoft's commitment to smartphones, the world's most popular computing device, and consumer technology in general after the company's retreat from the Windows Phone platform.
Microsoft under Nadella chose to dismantle the Nokia phone hardware units acquired under his predecessor, laying off tens of thousands of workers and taking a $10 billion financial hit from restructuring charges and writedowns. The company has invested in developing software for Apple- and Google-powered smartphones, at times at the expense of Windows Phone.
Nadella replied that he doesn't see consumer and business technology as separate categories in a world in which employees bring personal devices to work and vice versa. As a practical matter, he said, the company had prioritized targeting the far larger pool of users of Apple and Google smartphones.
But "we are not stepping away" from Windows Phone, he said.
Absent from the room Wednesday were Bill Gates, Microsoft's co-founder and current board member, and Steve Ballmer, the ex-CEO who remains a major shareholder. Technology news site GeekWire reported that both had prior commitments preventing them from attending.