Microsoft's Big Makeover Continues

Microsoft CEO Satya Nadella is giving the board its biggest makeover in history. Getty Images

New Microsoft Corp. MSFT -0.37% Chief Executive Satya Nadella is giving the board its biggest makeover in history.

Two Microsoft directors announced Tuesday they would leave by year's end. Their departure will make four company directors who have stepped aside since Mr. Nadella took over as CEO in February—the most turnover since Microsoft formed a board in 1981.

The departing directors are David Marquardt, a venture capitalist and early investor in Microsoft, and former finance-industry executive Dina Dublon. The pair won't seek new one-year terms on Microsoft's board, the company said Tuesday. Mr. Marquardt has been a Microsoft director since the company incorporated in 1981, and Ms. Dublon has held a board seat since 2005.

In their places, Microsoft said it had appointed Teri List-Stoll, the chief financial officer of Kraft Foods Group Inc., KRFT -0.70% and Charles Scharf, Visa Inc.'s CEO, to the board, effective Oct. 1. Before joining Kraft, Ms. List-Stoll, 51, spent nearly 20 years at consumer-products giant Procter & Gamble Co. The 49-year-old Mr. Scharf, was hired two years ago from J.P. Morgan Chase & Co., where he had run the New York bank's massive retail-banking operation and its private-equity unit.

The board changes underscore the remaking of the software giant under Mr. Nadella, the first Microsoft chief not associated with the company's founders. Co-founder Bill Gates also gave up his position as Microsoft's chairman in February, and former CEOSteve Ballmer left the board in August. Another director, Seagate Technology PLC CEO Stephen Luczo, stepped down in March.

Microsoft's board has been unusually busy in the past year, with the monthslong selection process for Mr. Ballmer's successor, and approval in September 2013 of Microsoft's transformative purchase of Nokia Corp.'s mobile-phone business. The $9.5 billion acquisition pushed Microsoft for the first time into making cellphones.

By year-end, six out of Microsoft's 10 directors will have joined since 2012, giving the company a largely fresh set of eyes in the boardroom to evaluate the company's efforts to push into mobile computing and cloud software.

The turnover also means Microsoft is losing institutional knowledge. Mr. Marquardt, a partner at Silicon Valley investment firm August Capital, helped Microsoft get off the ground and was a direct link to the company's earliest days. Ms. Dublon, a former J.P. Morgan chief financial officer, has been a member of the board's audit committee and chair of its compensation committee.

The board also approved a 10.7% increase in Microsoft's quarterly dividend, to 31 cents a share. A contingent of Microsoft shareholders has been seeking a bigger dividend increase or a large share buyback. But the stock-dividend yield under the new rate, 2.7% at Tuesday's closing share price of $46.76, sticks roughly in line with the company's recent dividend payout levels.