Microsoft unveils board rejection plan

Microsoft has amended its corporate governance guidelines to give shareholders a greater voice in removing directors, the software maker said Friday.

The company also announced its quarterly dividend of 8 cents per share to stockholders of record as of Nov. 17. The dividend is payable Dec. 8.

During fiscal 2005, the software maker rang up $44 billion in stock buybacks and dividend payouts, according to its fourth-quarter earnings report.

The shareholder initiative comes at a time when greater accountability is being demanded of boards.

Microsoft will now require a resignation request from any board member if a majority of shareholder votes cast for that director are marked "withheld" in an uncontested election.

Investors often demonstrate their displeasure with a particular board member by withholding votes for that director during election time, proxy specialists say. But even directors facing an onslaught of criticism--as was the case for former America Online executives who served on the merged board of Time Warner--often manage to garner more than 50 percent of the vote.

Under the amendment, Microsoft's board will review resignation requests and determine how to proceed from there, the company stated.

"Today's decision gives shareholders a greater voice in the process for selecting directors and continues Microsoft's tradition of strong corporate governance," Bill Gates, Microsoft chairman, said in a statement.

Microsoft directors apparently had little to worry about in the last election, which took place in 2004. Less than 3 percent of eligible votes were withheld for Microsoft directors, according to the company's filing with the Securities and Exchange Commission.