Is Bill Gates Bad for Microsoft?

The Citizen's Guide to the Future
Oct. 2 2013 12:21 PM

Is Bill Gates Bad for Microsoft?

Bill Gates
Some Microsoft investors think the company would be better off without its co-founder at the helm.

Photo by BRENDAN SMIALOWSKI/AFP/Getty Images

Bill Gates co-founded Microsoft and built into the world’s greatest technology company. He’s a legend in the industry. Everyone agrees he’s brilliant, and his dedication to charitable work suggests he has a lot of good in him, to boot.

But at Microsoft, some think it’s time for him to go. Reuters reports that three top investors, holding a little more than 5 percent of the company between them, are pressing the board to oust Gates as chairman. According to Reuters:

The three investors are concerned that Gates' presence on the board effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes. In particular, they point to Gates' role on the special committee searching for Ballmer's successor. They are also worried that Gates—who spends most of his time on his philanthropic foundation—wields power out of proportion to his declining shareholding.
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Gates once owned 49 percent of the company, but has been selling shares every year under a preset plan, Reuters notes. If the plan continues, he will have sold all his shares by 2018.

The idea that Gates could be forced after 38 years by a trio of disgruntled investors is far-fetched. Reuters is careful to note there’s no reason to believe the board as whole will comply with their wishes. Still, the story shows just how deep shareholders’ discontent runs. Longtime chief executive Steve Ballmer has already announced he’ll step down. To jettison Gates too would amount to a full-scale revolution in Redmond—which is, of course, exactly what a lot of investors want. The company missed the mobile wave, has stumbled with its recent operating systems, and has developed a corporate culture that stifles collaboration and fresh ideas. No doubt some shareholders would also prefer a board chair who devotes less of his or her time to good works around the globe and more to helping steer the company.

That might sound unfair. But as Gates himself could surely tell you, fairness isn’t always the top priority when it comes to running a major public company. In fact, if Gates could step back and evaluate Microsoft’s situation impartially, maybe he’d join the activist shareholders calling for his own departure.

It seems unlikely, though, that Gates will be able to tear himself away voluntarily from the company he has poured so much of his life into. A man who has met with so much success in life probably finds it difficult to fathom that he could be the one holding back the company from the changes it most needs to make. And so the safe bet is that Gates will stay on, and that the company won’t veer too far from its current course, even under a new chief executive. It would take a much bigger mutiny to turn around a ship this massive, with a captain this proud.

Will Oremus Will Oremus

Will Oremus is Slate's senior technology writer.

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