The Dell (NASDAQ: DELL) board of directors must have adopted the philosophy that firing Michael Dell will not bring back the tens of billions of dollars that the company’s market cap has come down since the founder returned in January 2007. It is a perverse defense of their decision to keep Dell, but it may be true. The firm’s prospects have been hurt so badly by poor management, which has caused a loss of its piece of the global PC market, that the firm’s stock price will never return to the $35 where it traded five years ago. The stock only goes above $12 occasionally at this point. Hanging Dell will not bring the company’s prospects back to life, they must think. Dell shareholders do not see it that way. Twenty-five percent of investors who cast votes for the firm’s recent proxy withheld their votes for Michael Dell to be CEO, a sign that they are tired of accounting scandals and shady business practices.
It is hard to remember when a founder’s term as CEO has been so vehemently objected to by shareholders, but it should send a message to the Dell board. Even in an age when stock owners have virtually no say over who runs the companies in which they hold shares, the PC maker’s governance is not up to the standards of a public company with standard board practices.
It is time to send Michael Dell home. Only his board has missed that. And it is, after all, his board
Douglas A. McIntyre