It’s not been a good week for Michael Dell.
Although the founder of computer maker Dell, was reelected to his company’s board this month, a regulatory filing shows a quarter of the votes withheld support for his election, showing a strong need by some to dump him as CEO.
Of the 1.5 billion votes, 25.1 percent of these (377.8 million) withheld their support for the chief executive and chairman in a company annual meeting on Aug 12.
Michael Dell received the lowest number of votes in favour of his election of all 11 directors reelected.
The revolt on the founder comes amidst allegations that Michael and the company failed to disclose payments the company received from Intel in return for an exclusive agreement to use only that company’s chips in its machines. Although neither Mr Dell or the company admitted the charge , the company paid $100m to settle the claim, while Mr Dell personally paid $4m.
The personal fraud charge however, left some shareholders uneasy about the way the company’s board is run.
And it got worse. On August 3, Dell institutional shareholders received a letter from two labour groups, the AFL-CIO and the American Federation of State, County and Municipal Employees, urging them to vote against Michael Dell. The two union said: “Based on the allegations in the SEC’s complaint against our company and Michael Dell, we believe that shareholders would be better served by the removal of Michael Dell as… chairman.”
By withholding support for Mr Dell’s reappointment as a director, “you can encourage the board of directors to appoint a new chairman.