I went to my first corporate shareholder’s meeting today – for Microsoft in Bellevue. I never went while I was an employee, we used to joke that it was at 8 am specifically to dissuade programmers from attending. I checked with someone afterwards and the content of the meeting is public, in fact you can watch it in webcast from the shareholder information section of the website at www.microsoft.com/msft. It was, in many ways, smaller than I expected. Sections were short, simple and to the point. The entire meeting, including shareholder resolution presentations, a short discussion of the business from Steve Ballmer, plus Q&A, was only an hour. Attendance was maybe 400 people? I ran into someone I knew from working there afterwards and he said in the past meetings have been much larger.
Most of the attendees were older folks, I’ll hazard a guess that the average age was at least 65. In fact on my way out one gentleman was seated in a chair and being checked over by emergency personnel. The attendees seemed primarily like direct shareholders from their questions in the Q&A. Before and after there was a product fair with stations demoing flagship products of Bing, Windows 7, the phone, Zune HD, and maybe one other. I snagged a Bing pen and watched the Microsoft person help two foggy-voiced gentlemen who wanted to search for “1970 chevy engine rebuild”. He showed them how to play around with quotes or not quotes to better their results, and was patient when one seemed to need to be 2 inches from the screen to read it.
I went to the meeting as part of my interest in better understanding the proxy voting/advocacy process. I chose this meeting for convenience rather than expectation of interesting issues so I was delighted to nearly walk into Larry Dohrs of Newground Social Investment with Bruce Herbert right next to him. We had just enough time for me to get his advice on voting my proxy before someone he’s been working with at the company lead them away to an assigned seat – it turns out they’ve been working with Microsoft for some time on a couple issues.
The meeting opened with a few formalities and then the shareholder resolutions – there were two. Each resolution had an advocate who was allowed to speak for 3 minutes. One was a resolution supporting health care principles, supported by someone from the AFL-CIO. The speaker concluded by asking Bill Gates to encourage the board to join other companies in calling for universal health care and Bill gave a slow empathetic nod. The other was a resolution that Microsoft publish its charitable giving, so everyone could see how the company supports homosexuality. In each case, after the speaker spoke, the meeting chair simply said “The board recommends a vote against this proposal for the reasons set forth in the company’s proxy statement.” Steve B. said his bit, Bill G. did not speak, and then they announced the results – 98% for all the resolutions management recommended voting 4, and 4% for each of the two shareholder resolutions. The rules as I understand them are that if you get more than 3% on the first presentation, you can resubmit the resolution again. You need 10% the second time and then if it doesn’t pass the 3rd time you’re done. Someone made a comment afterwards about having heard the speaker of the charitable contributions resolution before, in fact he’s listed in the transcription of the 2008 company meeting: Ken Hutcherson, so perhaps that’s it for this resolution.
The Q&A was truly interesting. About 10 folks stood up to ask questions and make comments and Bruce Herbert was the first, in fact it seemed arranged that way. He spoke about Newground’s submittal of a resolution for the company to publicly disclose political contributions and contributions to trade associations. The company chose to engage with Newground and make the requested changes and so the resolution was withdrawn. Bruce praised Microsoft for choosing to be a leader in this arena. I know this is definitely an issue the larger SRI community is working on across multiple companies, so my congratulations to both Microsoft and Newground.
Other folks followed with a variety of interesting and timely questions, and the crew on stage answered each one fairly thoughtfully.
A gentleman stepped up and thanked the company for funding his kids’ educations prep school through college, noted he still holds 54,000 shares and expressed his concern that the now-grown kids were all buying Apple products. Steve B acknowledged that Apple has gained a couple tenths of a percent of market share, that it definitely matters and that they’re working on it.
Larry Dohrs stepped up representing Newground, Walden and Calvert and their support for the Say on Pay which Microsoft has agreed to do, so this was clearly part of an ongoing dialog. However he noted his expectation that part of the agreement included a commitment to not lobby for the triennial cycle and so why did he read an op-ed from Brad Smith doing just that? Brad seemed a bit taken aback and said he had no knowledge of a commitment to stick to an annual cycle and that the triennial cycle made the most sense after dialog with institutional shareholders and that it was in the company’s best interest. It was interesting to me to get a glimpse of how these dialogs on shareholder issues clearly span multiple company meetings, and that these folks were not unfamiliar to company execs.
Only a question or two later, someone from the Worker Owner Council in Seattle gave his support for the triennial say-on-pay format, supporting the position that as an institutional shareholder his organization did not want to have to deal with x number of separate say-on-pay resolutions every single year. The number he cited was exactly the number that someone on the board had cited earlier so I had a feeling of a plant, but perhaps the “questioner” customized his comments to echo theirs on the fly. I noticed almost everyone followed a very staid format of easygoing speech which started with a generous but not effusive thank you to the company, followed by their criticism or question. The speaker in favor of the charitable disclosure resolution was an exception in having notable tension in his voice, but being the only exception was enough to make him stand out as an outsider (well, and his points that the company supports homosexuality and attacks the African American church.)
Also interesting to me was someone who announced himself as a representative of the Parents Television Council. He congratulated the company on canceling a sponsorship of a Seth Rogan TV special, and went on to lecture about how “Family Guy” is degrading and encourages violence against women and yet Microsoft still sponsors that. He actually sounded reasonable and cited some studies. Steve B. said that the company generally focuses on shareholder value but that they do take this stuff quite seriously and encouraged the guy to get in contact with him for dialog going forward, and it didn’t sound like a put-off.
Other questions: What’s Microsoft’s engagement with the redevelopment of the 520 bridge and a decision that happened yesterday? (Brad Smith has a meeting about it tomorrow and they’re totally engaged on upgrading 520.) What about a recent air traffic software incident? (Security and Reliability are issues we’re dedicated to.) What are you doing about IPhone and Android? (We’re ahead of Android and plan to stay there, working hard on phone.) Do you do any ethics training for employees? (3 hours at orientation on rules of business and a 30 minute online every year.) Protecting intellectual property- what about a court case that had some decision recently in China? (We haven’t analyzed the ruling yet. Piracy is a bigger issue in China than any other country and we’re committed to protecting IP.) However if this is the ruling, they definitely punted on the answer. And that was that, meeting adjourned.