NEW YORK/SEATTLE (Reuters)
Microsoft Corp board members have held talks with ValueAct Capital Management LP in recent days over demands from the investment firm's shareholders to secure a spot on the tech giant's board, two sources familiar with the matter said.
ValueAct, which wants to give its opinion on how the world's largest software company is adapting to the new world of mobile computing, is seeking to nominate a person from the firm itself, the sources said.
The San Francisco-based fund, which manages more than $10 billion for clients, had 33 million Microsoft shares as of March — representing 0.4 percent of the total stock stock — though it is believed to be buying more.
In recent months, major Microsoft institutional investors have contacted ValueAct to voice concerns about the execution of management and strategy, the sources said.
A major issue in the talks, which sources say are continuing, is the apparent lack of succession planning among the company's top brass. Steve Ballmer has remained ceo since 2000 and shows no signs of wanting to step down.
Ballmer, 57, once stressed that he planned to stay in the position until his youngest son goes to college, which would be around 2017 or 2018, but has not publicly addressed the issue since.
ValueAct declined to comment. Microsoft did not immediately respond to requests for comment. The software company has maintained that a succession plan for chief executives is underway, though it declined to give details of it.
On Friday, Microsoft shares had their biggest daily percentage drop since 2009. The company reported disappointing quarterly results due to weak demand for Windows and a $900 million charge for write-offs related to its Surface tablet.
