Michael Dell hit by shareholder protest
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Quarter of votes cast by shareholders withhold support for hardware company founder Michael Dell following SEC ruling that cost company $100m
Michael Dell faced a shareholder revolt at Dell’s annual general meeting last week, with a quarter of all votes cast withholding support for him as chairman of the board of directors.
A regulatory filing by the hardware vendor revealed that of 1.5 billion votes cast by shareholders, 337.8 million (25.1%) were not in support of Dell, who is also the company's CEO, continuing as its chairman.
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The shareholder protest comes on the back of a US Securities and Exchange Commission probe, which in July concluded that the company had inflated earnings to meet quarterly expectations. Dell also failed to declare payments from chip maker Intel for exclusively using its processors. The company neither admitted nor denied the charges.
Michael Dell was implicated in both accusations and the company was fined $100 million. Subsequently, two major US trade unions with significant stock holding in Dell called for shareholders to vote against the founder's chairmanship at the August AGM.
Dell's board insists that it will stand by its man. "The board has reiterated its unanimous support for Dell's continued leadership of the company," said David Frink, a spokesperson for the company. "The majority of shareholders agreed with them."
Michael Dell retained the chairmanship of the company when he stepped down as CEO in 2004 and in 2007 when he took back the reins from his successor Kevin Rollins, under whose leadership the company dropped 9% in share value.
Earlier this week, the company announced its intention to acquire 'virtual era' storage technology vendor 3PAR. It is the latest acquisition in concerted push into the storage space. Last year, the company greatly extended its services business with the acquisition of Perot Systems for $3.9 billion.
