Microsoft's Hidden Issue: Its Ancient Board

Microsoft Corp. (NASDAQ: MSFT) is still fighting for relevance, but this week brought on a new argument that may only just be starting to take hold. With Steve Ballmer to be replaced as chief executive officer already a known event (but not by whom), now the chatter is that certain shareholders want Bill Gates replaced as chairman. While this will take place one day in the future, the new proxy filing for the annual shareholder meeting does not signal that this is happening any time soon. One hidden issue may simply be age.

The new proxy shows what may be an unpopular discussion we are bringing up in the company’s fight for relevance in a rapidly changing world. Microsoft’s board of directors up for election may simply be too old to know how to properly appeal to future generations. We want you to look at the image below at the end of the report and you will see that the youngest age of ANYONE among the director nominees is 56 years old, followed by two 57-year-old men named Bill Gates and Steve Ballmer. The rest of the directors up for election are aged 60 to 67.

The “items of business” discussed on the proxy are all routine. The first matter is to elect nine directors from among the nominees described in this Proxy Statement. Another is to approve material terms of the performance criteria under the Executive Officer Incentive Plan. The company also is asking shareholders to approve the compensation paid to its Named Executive Officers on a nonbinding advisory basis.

There are two more issued up for vote as well. One is to ratify the selection of Deloitte & Touche as Microsoft’s independent auditor for the current fiscal year. The last is to transact other business that may properly come before the annual meeting. The last point is a catch-all that can include just about anything.

An issue that we would point out is that this is not meant as a jab solely to be to be insulting. Almost all of these board members would be solid board members to any company. It is just that the company is now fighting for relevance as the newest generation of workers are in their twenties, and about the only primary Microsoft items purchased by the next generation of future workers and consumers are video games and media. Can a bunch of nonexecutive directors in their sixties appeal to people in their twenties and younger? The board members, their ages and who they are employed by are listed below.

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