Question

In regards to the company Microsoft, present the following: ownership and control, board structure and firm’s interactions with the markets (Some of the data needed for this analysis can be obtained from the proxy reports via Edgar: Look up for form DEF 14A).

All that is required is a report on Microsoft's Ownership and Control, the Boards Structure, and the Firm's interactions with the Market, with data to support it.

Answer 1

Selected Financial Data

FINANCIAL HIGHLIGHTS

(In millions, except per share amounts)
Year Ended June 30,	2019	(a)	2018		2017	(d)(e)	2016	(d)	2015
Revenue	$125,843		$110,360		$96,571		$91,154		$93,580
Gross margin	82,933		72,007		62,310		58,374		60,542
Operating income	42,959		35,058		29,025	(f)	26,078	(g)	18,161	(h)
Net income	39,240	(b)	16,571	(c)	25,489	(f)	20,539	(g)	12,193	(h)
Diluted earnings per share	5.06	(b)	2.13	(c)	3.25	(f)	2.56	(g)	1.48	(h)
Cash dividends declared per share	1.84		1.68		1.56		1.44		1.24
Cash, cash equivalents, and short-term investments	133,819		133,768		132,981		113,240		96,526
Total assets	286,556		258,848		250,312		202,897		174,303
Long-term obligations	114,806		117,642		106,856		66,705		44,574
Stockholders' equity	102,330		82,718		87,711		83,090		80,083

Financial Review

ISSUER PURCHASES OF EQUITY SECURITIES, DIVIDENDS, AND STOCK PERFORMANCE

SHARE REPURCHASES AND DIVIDENDS

Share Repurchases

On September 16, 2013, our Board of Directors approved a share repurchase program (“2013 Share Repurchase Program”) authorizing up to $40.0 billion in share repurchases. The 2013 Share Repurchase Program became effective on October 1, 2013, and was completed on December 22, 2016.

On September 20, 2016, our Board of Directors approved a share repurchase program authorizing up to an additional $40.0 billion in share repurchases (“2016 Share Repurchase Program”). This share repurchase program commenced on December 22, 2016 following completion of the 2013 Share Repurchase Program, has no expiration date, and may be suspended or discontinued at any time without notice. As of June 30, 2019, $11.4 billion remained of the 2016 Share Repurchase Program.

We repurchased the following shares of common stock under the share repurchase programs:

(In millions)	Shares		Amount		Shares		Amount		Shares		Amount
Year Ended June 30,			2019				2018				2017
First Quarter	24		$2,600		22		$1,600		63		$3,550
Second Quarter	57		6,100		22		1,800		59		3,533
Third Quarter	36		3,899		34		3,100		25		1,600
Fourth Quarter	33		4,200		21		2,100		23		1,600
Total	150		$16,799		99		$8,600		170		$10,283

Shares repurchased in the first and second quarter of fiscal year 2017 were under the 2013 Share Repurchase Program. All other shares repurchased were under the 2016 Share Repurchase Program. The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards of $2.7 billion, $2.1 billion, and $1.5 billion for fiscal years 2019, 2018, and 2017, respectively. All share repurchases were made using cash resources.

Dividends

Our Board of Directors declared the following dividends:

Declaration Date	Record Date	Payment Date		Dividend Per Share		Amount
Fiscal Year 2019						(In millions)
September 18, 2018	November 15, 2018	December 13, 2018		$0.46		$3,544
November 28, 2018	February 21, 2019	March 14, 2019		0.46		3,526
March 11, 2019	May 16, 2019	June 13, 2019		0.46		3,521
June 12, 2019	August 15, 2019	September 12, 2019		0.46		3,516
Total				$1.84		$14,107
Fiscal Year 2018
September 19, 2017	November 16, 2017	December 14, 2017		$0.42		$3,238
November 29, 2017	February 15, 2018	March 8, 2018		0.42		3,232
March 12, 2018	May 17, 2018	June 14, 2018		0.42		3,226
June 13, 2018	August 16, 2018	September 13, 2018		0.42		3,220
Total				$1.68		$12,916

The dividend declared on June 12, 2019 was included in other current liabilities as of June 30, 2019.

OWNERHIP AND CONTROL

Microsoft Ownership

The largest shareholders of the company include both current executives and former company leaders.

1.Steve Ballmer

Former Microsoft owner CEO Steve Ballmer was not one of the original founders of Microsoft, but he is the largest shareholder with over 300 million shares. Ballmer's holdings date back to his early compensation package when he was the company's 30th employee hired as a business manager by Bill Gates.

On his first day on the job, Ballmer received an equity stake in Microsoft. When Microsoft incorporated in 1981, Ballmer owned 8% of the company. Ballmer was named CEO of Microsoft in January 2000 when took over the reins from Gates.

2.Bill Gates

Chairman and former CEO of Microsoft, Bill Gates is the headliner of several wealthiest people lists, with an approximate net worth of $94.9 billion as of October 2018, according to Forbes. Although Gates has sold or given away much of his stake in the company, Microsoft's co-founder still owns 330 million shares, according to British Telecom.

In May of 2017, Gates donated 64 million shares of his Microsoft stock, worth $6.4 billion at the time. To date, Gates has sold $35.8 billion worth of Microsoft Stock to fund the Bill and Melinda Gates Foundation. Gates and his wife Melinda began the philanthropic organization in 1997 and continue to lead its mission to improve lives in the poorest countries in the world. The private foundation focuses on health issues, such as the eradication of malaria and polio, and controlling the spread of tuberculosis and HIV. In November 2017, Gates made a $50 million donation to the Dementia Discover Fund to help fund Alzheimer's research.

3.Mason Morfit

Mason Morfit is a former member of Microsoft's Board of Directors. He is the youngest appointee by over a decade. Morfit's term on the board ended on November 29, 2017, during the annual Microsoft shareholders meeting. As of November 28, 2017, Morfit owed 9.01 million shares of Microsoft held indirectly through the company ValueAct, where Morfit was named chief investment officer in May 2017.

4.Satya Nadella

Satya Nadella took over for Steve Ballmer as CEO of Microsoft in 2014. Before taking the helm at Microsoft, Nadella was executive vice president of one of the company’s fastest-growing businesses, the Cloud and Enterprise group. Since taking over as CEO, company share prices have reached a 15-year high and projects such as the Windows 10 operating system and the Surface Book have performed well. According to the Securities and Exchange Commission (SEC), the current Microsoft CEO has 778,596 common shares, which is worth $100 million today. Nadella might regret selling 30% of his shares in 2018, but he also owns 2 million or so Microsoft shares of various other types.

5.Bradford Smith

Bradford Smith, president, and chief legal officer of Microsoft is the fourth-largest individual shareholder of the company's stock. Before joining Microsoft in 1993, he was an associate and then partner at Covington and Burling in Washington, D.C. In addition to his position at Microsoft, Smith serves on the board of directors at Netflix and chairs several non-profit organizations. Smith owns 946,742 shares of the company, according to an April 2019 filing from the SEC.

BOARD STRUCTURE

Thompson, Microsoft independent board chair. With Gates' departure, the Board will consist of 12 members, including John W. Thompson, Microsoft independent chair; Reid Hoffman, partner at Greylock Partners; Hugh Johnston, vice chairman and chief financial officer of PepsiCo;