No. 1 software maker Microsoft Corp. on Thursday awarded restricted stock worth $951 million, based on its current share price, as performance bonuses to some 900 executives and managers.
The shares were given to reward work over the past three years as part of a program Microsoft’s board adopted in 2003, when the software giant stopped awarding stock options to employees.
Altogether, the company handed out some 37 million shares of restricted stock — a third of which vested immediately. The rest of the shares will vest in two installments over the next two years.
James Cash, a Microsoft director who sits on the board’s compensation committee, said in a statement that the awards were set using “measurable criteria” to evaluate job performance and that their size was in line with industry practices.
Todd Bishop has more details (including the amount of the awards to seven top executives) and this observation:
But the company’s share price has been essentially flat over the past several years. As a result, the value of the stock awards is more than many executives would have received for the past three years had Microsoft continued to issue stock options, rather than shifting to awarding actual shares.
That’s the point, of course, if a somewhat dolorous one, but the idea that these awards in the Shared Performance Stock Award (SPSA) program are somehow based on performance, strikes a raw nerve with some. From a commenter on the MiniMicrosoft blog run by an anonymous Microsoft employee:
The company has missed all reasonable expectations of targets these past three years. To claim otherwise is a crime! So, do I think a crime will be committed this August? You bet! I know for fact that Microsoft is going to claim to have met the SPSA target metrics and will reward the partners with 100% allocations. Those of you on the inside can check for yourselves…
It’ll be interesting to see what internal scuttlebutt trickles out now that the awards have been made.
Update 9/5: The expected MiniMicrosoft post.