Like millions of investors, I bought stock in computer giants like Microsoft and Dell in hope of making a little money.  Unfortunately, neither company was famous for paying dividends, even though they're awash with cash.  As a result, my investment strategy took the form of capital appreciation or what is commonly referred to as the 'buy low sell high' approach.

Sounds good to me, but I like being a shareholder in the computer industry.  As corny as it may sound, it makes me feel I'm a part of the future in computer technology.  However, small investors like me are forced to sell their stock to make a little money and that means I'm a temporary owner at best.  Furthermore, buying back into these companies in the future could cost even more.  This might be a good strategy for the young investor, but when you're near retirement like me, you tend to buy secure investments with a reliable stream of income.

Lo and behold, after decades of extraordinary profits, Microsoft finally got around to paying 'token' dividends, but not before accumulating the greatest wealth known to mankind.  Avoiding dividends played an important part in Microsoft's growth and helped create the world's wealthiest executives as well as the largest charitable foundation on the face of the earth.  Meanwhile, Bill Gates and friends continue to maintain their ownership levels and make their money from, you guessed it, income in the form of salaries, bonuses, and other benefits such as stock options.  Conversely, little investors like you and me must become non-shareholders from time to time to make some money.  Somehow, I'm reminded of the old saying that charity starts at home and what better home than the little investor who had enough faith in your business to put his hard earned money on the line for a piece of your company.

Dell is no different than Microsoft except for one little point, they still don't pay dividends!  In fact, a single shareholder, Mrs. Linda Bush of Austin, Texas, submitted a proposal for vote at the upcoming 2006 annual meeting.  In it she asks for one thing, that the Board of Directors declare a quarterly dividend.  Her reasons were quite profound.  Also, note that she didn't ask for any specific amount.

Shareholder Resolution: That the Board of Directors declare a quarterly dividend. 

Supporting Statement: In the midst of public uncertainty and concerns over accounting practices, shareholders should demand sustainable and visible earnings from companies.  A dividend is a strong signal to the public of a vibrant and financially sound organization.  A dividend rewards an investor for continiung to be a shareholder in flat or declining markets.  It also creates a precedent of rewarding shareholders, and sets an expectation of future dividend growth.  Finally, dividend tax reform makes the delaration of a dividend at this time significantly more appealing than in years past.  At one point in time, Dell was better served by debt reduction, share buybacks, and strategic acquisitions; now as a more mature company with significant cash reserves the time is right to declare a quarterly dividend.

I urge your support for this issue.

Amen!  Needless to say, I voted in favor of her proposal.  Dell's Board of Directors, however, felt differently.

Dell's Statement of Opposition:  Enhancing the return on investment for Dell stockholder is of the utmost importance to Dell's Board of Directors and managment.  The Board believes that, at the current time, return on investment can best be enhanced by using the company's cash flow to reinvest in growth and to return capital to stockholders and manage dilution through the stock repurchase program.  The Board also believes that maintaining a stong liquidity position is in the stockholders' best interests and continually strives to balance the company's liquidity needs with the desire to return capital to the shareholders.

In other words, we need the money to either buy you out or make you want to sell to make money.  Correct me if I'm wrong, but doesn't this strategy create a bigger market for your stock, thus enhancing the profitability of exercising executive stock options?  As for me I want a return ON capital, not a return OF capital.

If any of you feel a need for legal intervention, the Board concludes with the following comment for your benefit:

Dividend Consideration:  Under Delaware law, the declaration and payment of dividends is within the discretion of the Board of Directors, whose members are elected by the shareholders to exercise sound business judgment in deciding such matters...

What they're really saying to you and me is sit down, shutup, and allow us to buy you out in an efficient and cost effective manner.  So, just who are these people elected by the shareholders and/or hired by those elected to exercise this sound judgment?

Kevin Rollins, President and CEO - Salary: $944k, Bonus: $1,794k, Stock Options: 650k shares (options presently valued at $6,318k).

Michael Dell, Chairman of the Board - Salary: $950k, Bonus: $1,805k, Stock Other Compensation: $991k

James Schneider, Senior VP  and CFO - Salary: $566k, Bonus: $538k, Stock Options: 200K shares (options presently valued at $1,944k).

Paul Bell, Senior VP - Salary: $547k, Bonus: $521k, Other Compensation: $1,458k, Stock Options: 200k shares (options presently valued at $1,944k).

Rosendo G. Parra Senior VP - Salary: $547k, Bonus: $521k, Stock Options: 200k shares (options presently valued at $1,944k).

Directors and executive officers as a group (26 persons) - Shares Owned: 218 million shares, Options Exercisable Within 60 Days: 44 million shares, Total Beneficial Ownership: 262 million shares.

As for me, I own a whopping 75 shares worth a little over $1,800.  I've never realized any income from Dell except for a small rebate on a Dell laptop computer I purchased several years ago.  In the event I sell this stock, my potential return OF capital would net me a $280 LOSS.

So much for democracy in corporate America.