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Microsoft Shareholder Proposal

There's an interesting shareholder proposal in Microsoft's '03 proxy statement:

The shareholders request the company to refrain from making direct charitable contributions. If the company wishes, it could pay a dividend and send a note to shareholders suggesting they contribute it to their favorite charity.

The shareholder meeting is on the 11th, so there's still time to vote your shares if you haven't already.

I decided to vote in favor of this proposal, but not because of the argument given in the proposal's supporting statement, which I thought was very bad:

Thomas Jefferson once wrote, "To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical." … By making charitable contributions at the corporate level, we have usurped the right and duty of individuals to support their favorite charities. We may, also, be forcing thousands of people to finance causes they may disagree with on a most profound level. … Rather than compel our stakeholders to support potentially controversial charitable groups, we should refrain from giving their money away for them. Let each person choose.

The problem here is that nobody is being compelled to do anything. People own Microsoft stock voluntarily, and Microsoft's policy and history of charitable giving are public knowledge. Jefferson's argument is one against the actions of government, not against the actions of people or groups of people (such as a corporation). Government and business are fundamentally distinct — government uses force, and business may not.

Jefferson's argument is a convincing cudgel against public education (which brazenly glorifies environmentalism, and can't quite shake away the creationists, among other nonsense) but it absolutely does not apply to Microsoft. Microsoft is not a government, it can't compel anyone.

I voted in favor of the proposal because I want Microsoft to focus on earning money, not on giving it away (except as a dividend, which I hope they increase.) The recommendation that Microsoft pay out a dividend instead of making charitable contributions is eminently sensible, and I would be happy to send that money to my favorite charity.

Tiny Island