On the day of Microsoft's (NASDAQ:) annual meeting, shareholders voted against a proposal that would have prompted the company to consider adding to its balance sheet. The proposal, proposed by the National Center for Public Policy Research, states that given the prevalence of inflation, companies have an obligation to protect their profits from eroding by diversifying their investments and possibly including assets such as Bitcoin. suggested.
The proposal highlighted the underperformance of traditional assets such as U.S. government bonds and corporate bonds compared to Bitcoin's strong rally. The report noted that Bitcoin's price has increased 99.7% in the past year and 414% in five years, significantly outpacing corporate bonds. The recommendation was to evaluate the adoption of Bitcoin to protect shareholder value from inflation.
Microsoft's board of directors opposed the proposal, explaining that the company's management has already conducted a thorough evaluation of investable assets, including cryptocurrencies, to ensure liquidity and operating capital. The Board emphasized the importance of stable and predictable investments for corporate finance applications, given the volatility of cryptocurrencies.
Additionally, the board noted that Microsoft's global treasury and investment services team continues to monitor trends and developments in cryptocurrencies to inform future decisions. Microsoft has robust processes in place to manage and diversify its finances for the long-term benefit of its shareholders, and the proposed public review is unnecessary, the board said.
The rejection of this proposal shows that Microsoft's shareholders and board of directors agree on a cautious approach to cryptocurrencies as part of the company's investment strategy. Despite the promise of higher returns, the company prioritizes stability and risk management in its asset allocation decisions.
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