Dell Fails to Get Board Re-Election Votes From 25% of Investors
Dell Inc. Chief Executive Officer and Chairman Michael Dell failed to win the support of more than a quarter of the computer maker’s shareholders for re-election to the board, the company said yesterday in a regulatory filing.
About 377.8 million of the 1.5 billion votes cast, or 25.1 percent, were to “withhold” support for CEO Dell as a director at the company’s Aug. 12 shareholder meeting in Round Rock, Texas.
The vote comes as Dell’s sales and earnings per share have declined in each of the past two years. In light of that, the vote isn’t surprising, said Shaw Wu, an analyst at Kaufman Bros. LP in San Francisco, who has a “hold” rating on the shares. Dell’s acquisitions haven’t transformed the company, he said.
“Many investors think they need a change in direction and that the moves they’ve made aren’t progressive enough,” Wu said. “They need a CEO who can really come in and bring some big changes.”
A sizable protest vote against the chairman is still unusual for a large public company such as Dell, said Jayson Noland, an analyst at Robert W. Baird & Co. in San Francisco.
“There have been managerial complaints made against Dell from time to time, but I certainly wouldn’t expect anything to change with regard to Michael’s role as chairman and CEO as a result of this,” said Noland, who has an “outperform” rating on Dell shares.
On Aug. 3, Dell institutional shareholders received a letter from two labor groups, the AFL-CIO and the American Federation of State, County and Municipal Employees, urging them to vote against Michael Dell. The letter cited his and the company’s July 22 settlement of accounting-fraud claims with the U.S. Securities and Exchange Commission.
“The Dell board had expressed its confidence in Michael Dell’s leadership and the majority of shareholders agreed with them,” Dell spokesman Jess Blackburn said yesterday.
Dell rose 13 cents to $12.19 at 5:19 p.m. New York time in Nasdaq Stock Market trading. The stock has fallen 15 percent this year.