Microsoft Corp., the world’s largest software maker, announced a new $40 billion stock buyback plan and increased its dividend 22 percent, seeking to reward shareholders as the company undergoes a change in strategy and leadership.
The repurchase program, which has no expiration date, replaces another $40 billion buyback plan that was due to lapse at the end of this month, Microsoft said today in a statement. The company’s quarterly dividend will rise to 28 cents a share, payable on Dec. 12 to shareholders of record as of Nov. 21.
Microsoft signed a pact last month to cooperate with ValueAct, saying it would hold regular meetings with the firm’s president, Mason Morfit. Under the agreement, ValueAct also has the option of having Morfit become a director beginning at the first quarterly board meeting of 2014.
Microsoft is grappling with a shift from the personal- computer market -- where its Windows and Office software is dominant -- to mobile and Web-based applications. While Microsoft’s traditional products remain profitable, its expansion into new areas hasn’t gained as much traction.