The Steve Ballmer era is coming to an end at Microsoft, but that’s not enough for some investors who want a clean break with the past.
For the first time, major shareholders are said to be pushing for Bill Gates, Microsoft’s co-founder and chairman, to resign from the company he helped found more than 38 years ago.
Three investors, who combined hold more than 5 percent of the company’s stock, are lobbying the board to banish the tech visionary as the software behemoth struggles to reinvent itself, according to a report.
While Ballmer bears the brunt of the blame for the company’s missteps, the investors believe that Gates is also an obstacle to overhauling the once-dominant PC giant, Reuters reported.
“It’s not unreasonable to make that call” for Gates to leave, said one Wall Street insider.
None of the investors pushing for Gates’ ouster were identified in the Reuters report. But Microsoft has been feeling the heat from activist shareholders including ValueAct Capital, which pressed for management changes. The hedge fund even won a board seat this summer.
Gates, whose $72 billion fortune routinely ranks him as the richest man in the US, stepped down as CEO in 2000 to focus full time on philanthropy.
He still owns about 4.5 percent of the company and remains its largest individual shareholder. Gates also sits on the board committee tasked with searching for Ballmer’s successor.
But the days when he was a guiding force at Microsoft “have come and gone,” a source said.
Gates owned 49 percent of the company when it went public in 1989. He has been steadily selling his shares under a pre-set plan, and by 2018, will have unloaded all of his Microsoft stock.
Microsoft still makes a mint off its Windows operating system and Office applications, but its PC business is under siege from tablets, smartphones and other mobile devices.
The stock is down 40 percent since Gates left in 2000 and has been flatlined for more than a decade. Shares rose 1 percent on Wednesday to close at $33.92.
In August, Ballmer, who was Gates’ handpicked successor, announced he would retire after 13 years. Microsoft said it would search for a replacement while it pushed ahead with its strategy to overhaul the company.
But investors are growing increasingly concerned that the new strategy looks a lot like the old one.
They were baffled last summer when the company announced a reorganization, revealing it was doubling down on its so-far unsuccessful strategy to compete with Apple and Google.
Microsoft unified its sprawling businesses and said it is pursuing a strategy of building tablets, smartphones and computers, developing the hardware and the software.
A number of shareholders had been hoping Microsoft would ditch the consumer- facing business plan for one that focuses on enterprise.
Instead, Microsoft bought Nokia last month for $7 billion, gearing up to make even bigger mobile computing moves.