Three of Microsoft’s top 20 investors are reportedly lobbying the board to press for Bill Gates to step down as chairman.
This appears to be the first time that major shareholders are taking aim at Gates, who co-founded the software company 38 years ago and remains one of the most respected and influential figures in technology, with chief Executive Steve Ballmer normally bearing the brunt of pressure to improve the company's performance and share price.
There is no indication that Microsoft's board would heed the wishes of the three investors, who collectively hold more than 5 per cent of the company's stock, according to the sources. A representative for Microsoft declined to comment yesterday.
Gates owns about 4.5 per cent of the $277bn (£171bn) company and is its largest individual shareholder, but he owned 49 per cent before it went public in 1986 and sells about 80 million Microsoft shares a year under a pre-set plan, which if continued would leave him with no financial stake in the company by 2018.
The three investors are reportedly worried that Gates – who spends most of his time on his philanthropic foundation – wields power out of proportion to his declining shareholding. He lowered his profile at Microsoft after he handed the CEO role to Ballmer in 2000, giving up his day-to-day work there in 2008 to focus on the $38bn Bill & Melinda Gates Foundation.
They are also concerned that Gates' role as chairman 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.
In August, Ballmer said he would retire within 12 months, meaning Microsoft is now looking for a new CEO, though its board has said Ballmer's strategy will go forward.
He has focused on making devices, such as the Surface tablet and Xbox gaming console, and turning key software into services provided over the Internet. Some investors say that a new chief should not be bound by that strategy.
News that some investors were pushing for Gates' ouster as chairman provoked mixed reactions from other shareholders.
"This is long overdue," said Todd Lowenstein, a portfolio manager at HighMark Capital Management, which owns Microsoft shares. "Replacing the old guard with some fresh eyes can provide the oxygen needed to properly evaluate their corporate strategy."
Kim Caughey Forrest, senior analyst at Fort Pitt Capital Group, suggested now was not the time for Microsoft to ditch Gates, and that he could even play a larger role.
"I've thought that the company has been missing a technology visionary," she said. "Bill (Gates) would fit the bill."