Gates will surrender Microsoft shareholder crown to Ballmer in 2014

His influence as largest stockholder wanes as Gates sells off holdings

Microsoft co-founder Bill Gates' once-invulnerable position as the company's biggest stockholder continued to erode in the fourth quarter of 2013 as he sold another 20 million shares.

As of Friday, Gates remained Microsoft's single-largest shareholder, but his lead over friend and current CEO Steve Ballmer was less than 25 million shares, giving the latter the chance to become the prime stockholder within months.

Over the last decade, Gates has sold an average of 80 million shares annually, according to filings with the U.S. Securities and Exchange Commission (SEC), part of a plan to divest holdings in the company he and Paul Allen founded in 1975. Gates has pledged to give away the bulk of his wealth, with the Bill & Melinda Gates Foundation as a tool for that task.

Between Oct. 28 and Nov. 1, Gates sold 20 million shares worth $711 million, leaving him with 357,990,173 shares at the end of 2013, down from 1.1 billion shares in September 2004. Meanwhile, Ballmer's holdings remained at 333,252,990 shares.

Gates' shares were worth approximately $13.2 billion as of Friday, or 17% of his estimated $78.1 billion net worth, as calculated by Bloomberg. That amount made Gates the world's richest individual.

At his 10-year pace of selling stock, Gates will hand over the shareholding crown to Ballmer before mid-2014. Gates will have exhausted his holdings by September 2018 unless he stops or slows his selling.

While Gates' position as chairman and his influence on the company are not solely based on his stock holdings -- he is an iconic technologist, credited with building Microsoft into the world's leading software maker, its wares on more than 90% of the globe's personal computers -- those millions of shares carry enormous weight.

Gates has always been Microsoft's largest stockholder, according to proxy filings with the SEC, which are available as far back as 1994, eight years after the company went public. For him to cede that position will be historic.

Even though his stock holdings are shrinking, Gates may not be stepping down from the head of Microsoft's board any time soon, as some have urged him to do.

In October, Reuters said three of the company's top 20 investors asked the board to oust Gates from his chairmanship. Citing anonymous sources, Reuters said the investors were worried that Gates would block the hiring of a new CEO eager to change the company's current direction, and handcuff that person to the moves Ballmer has executed in the last year, including devising a new "devices and services" strategy, starting a sweeping reorganization of the company and buying much of the Finnish handset maker Nokia.

Gates is on the search committee for Ballmer's replacement, who will likely be revealed in the next few weeks.

Gates share of Microsoft stock
Bill Gates' stake in Microsoft has withered over the last decade as he sold about 80 million shares annually. (Data: Microsoft proxy filings with the SEC.)
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