Microsoft Corporation (MSFT) Board Losing Ballmer Could Mean More Cash for Shareholders

Microsoft Corporation (NASDAQ:MSFT)’s board lost Steve Ballmer on Tuesday, as the former CEO stepped down, citing concerns that he wouldn’t be able to devote enough time to the board in light of his recent purchase of the Los Angeles Clippers, and some of his other civic duties and interests. As was discussed on CNBC, the move could prove a boon for Microsoft Corporation (NASDAQ:MSFT) shareholders, who may have more influence over the board and its initiative to buy back shares.

“[…] I think it’s an opportunity to have these directors more engaged with shareholders, and I think shareholders are going to have more influence on the board. And one of the top priorities of shareholders has been not only change management, fix the strategy, reduce costs, it’s also return some of that cash to shareholders […],” said Rick Sherlund, U.S technology team head with Nomura Securities.

As Sherlund explained, both Ballmer and former chairman Bill Gates were conservative when it came to retaining cash, which Microsoft Corporation (NASDAQ:MSFT) is chock full of; the company has approximately $83 billion in cash, and could very comfortably buy back $10 billion or more in stock over the next few years.

If there is a dramatic shift in the culture of the board, it could become evident as early as mid-September, according to Sherlund, when the board meets to discuss the increase in their dividend. It’s possible the change could be seen this early to affect the dividend, though other issues related to strategy may take precedence at this early juncture.

Sherlund also pointed out that it may be seen as unseemly to increase shareholder cash in the midst of Microsoft Corporation (NASDAQ:MSFT)’s recent layoffs. Either way, he expects a bold move made by the board within the next year, which could positively influence Microsoft Corporation (NASDAQ:MSFT)’s shares, which are already up 35% since Satya Nadella took over as CEO in February.

Disclosure: none