Microsoft Corp has lately decided to raise its quarterly payout by 22 percent and renew its $40 billion share buyback scheme. This program will attract a number of investors. This unexpected rise in Microsoft’s payout produces around 3.4 percent, which is in the lead from its rivals such as IBM Corp and Apple Inc.
Analysts suggest that this program might not appeal activist investment firm ValueAct Capital and its supporters. They say that ValueAct now has a chance to reserve a berth on Microsoft’s governing board and adequate opportunities to take its control.
ValueAct has still not disclosed its targets. But sources within the firm inquire about CEO Steve Ballmer’s leadership and vision of acquiring Nokia’s major business units to renovate the low-margin hardware trade, and that it needs increased payouts and stake buybacks.
On the Nasdaq exchange, Microsoft’s shares closed 0.39 percent higher at $32.93.
A much awaited investor meeting on Thursday will give shareholders their first right to question management on who are looking for Ballmer’s successor. Current CEO, Steve Ballmer notified to leave the tech giant within 12 months after ValueAct pressed for his replacement.
Sources are still vague that how hard ValueAct pushed Microsoft to give more of its $70 billion cash hoard. ValueAct CEO Jeffrey Ubben refused to talk about Microsoft during an industry function in New York this Tuesday.
Earlier, investors have been repeatedly asking Microsoft to give cash to shareholders rather than investing in peripheral projects, and minimize its concentration on serving enterprise consumers with its hugely lucrative and popular Windows, Office and server products.
Microsoft declared to purchase Nokia’s several major business units and license patents for 5.44 billion Euros ($7.2 billion). Several industry experts criticized this decision as this battleground already dominated by its rivals like Apple and Google Inc hardware and software.
Microsoft has paid for almost $3 billion on its Bing search engine and other Internet programs in the last couple of years alone. It also failed on a $6 billion write-off for buying online advertising agency aQuantive.
According to S&P Dow Jones indices, Microsoft is at fourth place on Wall Street in terms of actual cash payouts, following Apple, Exxon Mobil and AT&T Inc. As far as payouts are concerned, the software behemoth ranks fourth among U.S. information technology companies, behind Intel Corp, Seagate Technology and Microchip Technology Inc.
On the other hand, Microsoft and Cisco’s former executive, 24-year Collete Kress has been hired by Nvidia as its new executive vice president chief financial officer.
Earlier, Kress was employed at Texas Instruments before switching to Microsoft for 13 years. She was overseeing the Server and Tools division CFO for four-year tenure alongside having senior positions in finance and corporate planning sectors at Microsoft.