Shareholders approve $32bn Microsoft payout

Microsoft shareholders on Tuesday overwhelmingly approved changes to the company's stock compensation programmes, clearing the way for the software maker to complete a one-time, $32bn payout.

To get the $3-per-share dividend, shareholders were asked to make changes to ensure the payout doesn't hurt stock compensation programmes for employees, directors and consultants. More than 94 per cent of shareholders approved the two required measures.

Microsoft plans to make the payout on 2 December to shareholders of record as of 17 November. The dividend is part of a plan by Microsoft to return $75bn to shareholders over four years. Shareholders also approved the company's proposed slate of directors and its auditor, Deloitte Touche Tohmatsu.

At the meeting, chairman Bill Gates and chief executive Steve Ballmer offered a bullish forecast for the company's future, voicing familiar refrains on the power of software and Microsoft's strategy of "integrated innovation".

Ballmer highlighted opportunities in the search business in particular, saying Microsoft's investment will allow the company to more than double its advertising revenue in the next five years.

"We think there is a heck of a lot of great new innovation in the search space," Ballmer said at the meeting, held in Bellevue, Washington. "We will catch up. We will surpass."

Asked about Microsoft's evolving attitude toward open-source software, Ballmer said the company is working to make its products interoperable with non-Microsoft software but is also competing where it can.

In addition, the company is trying to highlight the support it can give its customers that they might not get with open-source alternatives, he said. "We enhance the intellectual property indemnifications we give our customers," Ballmer said. "We can stand behind our products in a way that open source can't, because they have no one standing behind them."

The company was also queried about its stock price, which has hovered in the same range despite the company's growth in profits and the plans for the cash payout, stock buyback and boosted dividend. On Tuesday morning (PT), the price stood at $29.51.

One shareholder said: "Our stock has been flat for four years," noting that the enthusiasm and energy of executives has not translated into stock growth.

Chief financial officer John Connors commiserated with shareholders. "Obviously we have been in sort of a stagnant, narrow range for a while."

Ballmer offered his own take. "We don't surprise anyone numerically very often," he said. Much of the company's profit improvements in the past few years may have been priced into shares, but if the company can do all the things it has planned, it will be able to achieve further growth, he said.

"If that all happens, the stock price will take care of itself," Ballmer said.

Ina Fried writes for CNET News.com.