Dell shareholders show disdain for CEO

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- One quarter of Dell shareholders showed their disdain for Michael Dell, founder and chief executive, by withholding support just weeks after the computer maker settled a fraud case with the SEC.

In a filing to the Securities and Exchange Commission on Tuesday, Dell (DELL, Fortune 500) revealed that voters controlling 378 million shares withheld support for the CEO. Those controlling 1.13 billion shares voted in favor of him.

Among the 11 directors at Dell, Michael Dell received the lowest number of supporting votes.

But Dell spokesman David Frink maintained the company's confidence in its CEO. "The Dell board of directors has reaffirmed its unanimous support for Mr. Dell's continued leadership, and a majority of shareholders agreed," he said.

The filing came out just days before Dell is scheduled to report quarterly results on Thursday, and just weeks after the company agreed to pay a $100 million fine to settle fraud charges with the SEC.

That settlement, announced July 23, ended a five-year case that has plagued the company and its chief executive. The SEC accused Dell of not disclosing to its investors "large exclusivity payments" made to the company by chipmaker Intel (INTC, Fortune 500), as part of an agreement that Dell not use chips made by rival AMD (AMD, Fortune 500).

The payments were large enough to make up 76% of Dell's operating income in the first quarter of 2007, as well as double-digit percentages of earnings in other quarters.

In a separate legal battle, Web services company Advanced Internet Technologies has accused Dell, in an Aug. 13 filing to a U.S. district court in North Carolina, of refusing to comply with court orders to reveal secret documents in a dispute over faulty computers.

Advanced Internet Technologies has sued Dell for damages from the breakdown of nearly 2,000 OptiPlex systems it leased to clients. The company said it lost nearly $16 million from cancelled contracts and $22 million on discounts it offered to hold onto spurned customers.

On Thursday, Dell is expected to announce second-quarter revenue of $15.2 billion, a 19% gain from the year-earlier quarter, and earnings of 30 cents per share, a gain of 3%. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,563.30 -317.06 -1.88%
Nasdaq 4,369.77 -93.13 -2.09%
S&P 500 1,930.67 -39.40 -2.00%
Treasuries 2.56 0.00 0.08%
Data as of 8:12pm ET
Company Price Change % Change
Bank of America Corp... 15.25 -0.33 -2.12%
Micron Technology In... 30.55 -1.98 -6.09%
Apple Inc 95.60 -2.55 -2.60%
Facebook Inc 72.65 -2.03 -2.71%
Pfizer Inc 28.70 -0.56 -1.91%
Data as of 4:04pm ET

Sections

Eventually a Tesla service team will be able to pick up your car, service it, and return it to you that same day, according to Elon Musk. More

With RadioShack burning through cash, investors and credit rating agencies believe its days are numbered. More

LinkedIn shares surged in after-hours trading Thursday following strong second-quarter earnings, following the likes of Facebook and Twitter. More

Terrell White has had a profit-sharing plan for his employees since 1981, believing that if the staff isn't happy, guests won't be either. More

The Mason family, which has been struggling to pay the $100,000 student loan bill they were left with when their daughter passed away five years ago, is now seeing an outpouring of support. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.