Dell: Turnaround Plan Not About Quick Fixes

Michael Dell, chairman and CEO of the company, also declined to explain why shares of his company's stock dropped by 15 percent last week, after it reported its fastest earnings growth in about a year. But Dell said the company would stick by its rebound plans, which include a new engagement with commercial resellers.

"I think the confidence that you see from our board of directors is demonstrated by the additional approval to repurchase $10 billion of our company's stock," Dell said. During the session, Dell and CFO Donald Carty explained the company's strategy to rebound from two lackluster years of sales and earnings and market share losses, including a focus on aggressive growth in notebooks, simplifying IT in the enterprise and expanding beyond its direct-only focus.

"We've entered new channels with retail partners to meet our our customers where they are," Dell told shareholders. Since the last shareholder meeting, Michael Dell has replaced Kevin Rollins as CEO and has said publicly that the Round Rock, Texas-based company would engage commercial resellers more aggressively.

The company is slated to meet with solution providers in a "virtual town hall" on Wednesday, and has vowed to launch a new channel program by year's end. In addition, Dell this year has opened up new relationships with retailers including Wal-Mart in a move to recapture some lost market share.

The shareholder meeting began with a sober message from Carty, who referred to the year-long investigation into accounting and financial reporting misstatements, which included misconduct by Dell employees including unnamed senior executives. Dell has since restated some earnings and has launched a reorganization of its financial and accounting units.

Investigations by the U.S. Securities and Exchange Commission and the U.S. Attorney for the Southern District of New York continue.

"Put very simply, we're not proud of some of the issues we've discovered," Carty said. "We are committed to remediating the issues and improving our level of financial control. We're improving our financial control systems. We're improving the knowledge and the experience of our finance and accounting teams."

During the shareholder meeting, stockholders and their proxies voted to re-elect Dell's entire board of directors, and voted to reject proposals to pay dividends to investors and to require executives to hold shares of stock, acquired as compensation, for a fixed length of time.

Shareholder Linda Bush, who has offered a formal proposal for dividends for several years, also addressed the gathered investors and told Dell and Carty: "I commend you on your direct model, on the deviation from it" and for putting Dell products into retail establishments and outside the direct channel. "I think this is wonderful," she said. However, she held firm in her argument that dividends -- which Dell rivals including IBM and Hewlett-Packard provide shareholders -- should be instituted at Dell.