On the day of Microsoft (NASDAQ:)’s annual meeting, shareholders voted against a proposal that would have prompted the company to consider adding to its balance sheet. The proposal, put forward by the National Center for Public Policy Research, suggested that in light of rampant inflation, corporations have a duty to protect their profits from debasement by diversifying their investments, potentially including assets like Bitcoin.
The proposal highlighted the underperformance of traditional assets like US government securities and corporate bonds compared to Bitcoin’s significant appreciation. It cited Bitcoin’s 99.7% price increase over the past year and a 414% increase over five years, outpacing corporate bonds by a wide margin. The recommendation was to assess the inclusion of Bitcoin to safeguard shareholder value against inflation.
Microsoft’s board opposed the proposal, explaining that the company’s management already conducts thorough evaluations of investable assets, including cryptocurrencies, to ensure liquidity and operational funding. The board emphasized the importance of stable and predictable investments for corporate treasury applications, considering the volatility of cryptocurrencies.
The board further stated that Microsoft’s Global Treasury and Investment Services team continuously monitors trends and developments in cryptocurrencies to inform future decisions. According to the board, Microsoft has robust processes in place to manage and diversify its treasury, aiming for the long-term benefit of shareholders, making the proposed public assessment unnecessary.
The rejection of the proposal indicates that Microsoft shareholders and the board are aligned in their cautious approach towards cryptocurrency as part of the company’s investment strategy. Despite the potential for higher returns, the company prioritizes stability and risk management in its asset allocation decisions.
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