Microsoft's Special Meeting Amendment

| About: Microsoft Corporation (MSFT)

Microsoft (NASDAQ:MSFT) declared its quarterly dividend Wednesday. In addition it also announced that the board of directors has passed a resolution:

The board also passed a resolution recommending that the company’s shareholders approve amendments to Microsoft’s articles of incorporation to give shareholders representing 25 percent or more of outstanding shares the right to call special shareholder meetings.

The ability of shareholders to call special shareholder meetings is increasingly considered an important shareholder right,” said John Seethoff, vice president and deputy general counsel for Microsoft. “Proposing this new policy is another example of our ongoing commitment to maintaining strong corporate governance principles and practices.

This will be voted on by shareholders in November.

A pro-shareholder move like this from Microsoft’s board is not all that surprising. Considering that Bill Gates is good friends with Warren Buffett and serves on the board of Berkshire Hathaway (NYSE:BRK.A), you would think that the Microsoft board would have a pro-shareholder bent to it. But at the end of the day even Bill Gates will not be calling any special meetings on his own. At around 733 million shares he is the largest shareholder ringing in just above 8%. The largest institutional investor is just under 4%.

My first impression of this was that it is more of a PR move to say “See we care about our shareholders!”. In reality if the management of the company were to start failing its shareholders it is quite possible that larger shareholders could band together or reach out to rally the support of a group representing 25%. All in all I think its a good move and I like the fact that the board of directors decided to propose this resolution.

Disclosure: I own shares of MSFT at the time of this writing.