This week's annual shareholders meeting, on Thursday, comes during an upswing for the software company.

Last year’s Microsoft shareholders meeting was a downer for the company. Turnout was scant, and CEO Steve Ballmer’s adamant no on a Yahoo merger sent Microsoft shares to their lowest point since 1998.

A shareholder stood up and asked Ballmer whether the best was still to come.

This week’s annual shareholders meeting, on Thursday, comes during an upswing for the software company.

The stock has been trading at a 12-month high. The will-they-or-won’t-they, Microsoft-Yahoo dance has drawn to a close after the two companies agreed on a partnership that cost far less than a merger.

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Microsoft spent most of the year cutting 5,800 jobs. And it shipped Windows 7 in October, while even gaining a little traction with its upgraded search engine, Bing.

Whether it’s the light at the end of the economic tunnel or the spring in the company’s step, shareholders evidently like what they are seeing.

“If you think about it, it’s been an amazing year,” said Chief Financial Officer Chris Liddell. “A year ago we were in the middle of what potentially looked like the worst financial meltdown of our generation.”

Now, he said, “Whilst we’ve still got lots of challenges, it’s clearly a much improved situation. Things have certainly stopped getting worse, which is the first necessity for getting better.”

In January, the company said it would eliminate 5,000 jobs, while still creating 2,000 to 3,000 new positions. Earlier this month, Microsoft finished the cuts and topped it off with 800 more for a total 5,800.

While there are still 90,000 employees worldwide, it was the first major reduction for a company that had doubled its head count in the past decade.

Financially, Microsoft sales dipped in fiscal 2009, which ended June 30, to $58.4 billion from $60.4 billion in fiscal 2008.

The decline marked a first for a company accustomed to doubling revenue every few years.

The company, he added, has momentum both on cost cutting and product development.

“From my perspective as CFO — and I’m not minimizing at all the individual pain associated with people leaving the company — the company is actually performing extremely well, the products are going out on time, market acceptance is very good, the revenue trends on a relative basis are starting to look very good, costs are under control and cash flow remains very strong,” he said.

Shareholders will vote on the following issues at Thursday’s 8 a.m. meeting at Meydenbauer Center in Bellevue:

• Re-electing the board of directors: Chairman Bill Gates, CEO Steve Ballmer, Dina Dublon, Raymond Gilmartin, Reed Hastings, Maria Klawe, David Marquardt, Charles Noski and Helmut Panke. James Cash is retiring and his seat will not be filled immediately.

• Ratifying and selecting Deloitte & Touche as Microsoft’s independent auditors.

• Allowing major shareholders to call a special shareholders meeting.

• Approving a new compensation package for Microsoft executives, or what the company calls “say on pay.”

There are two shareholders proposals up:

• Adopting health-care principles stating coverage in the nation should be universal, continuous and affordable. The board has recommended against the proposal.

• Requiring Microsoft to disclose charitable contributions of $5,000 or more, which the board also recommended rejecting.

Sharon Pian Chan: 206-464-2958 or