Fully Funded the Microsoft Executive Payment Pool
With an economy tanking, and people finding that their 401K’s and 301B’s are being slowly wiped out by corporate failure, as well as the not fully funded retirement funds for many companies, Briar Dudley and Mini-Microsoft chime in with the .035% compensation pool for Microsoft corporate officers. The news is interesting if the reaction is muted with bigger things going on like the Federal seizure of Washington Mutual this morning.
This is a great time to slide some compensation information in under the radar.
Microsoft is a great company, and they make a lot of money, the question is going to be what this will look like when there is a huge backlash against executive compensation going on right now in the USA. What is even more interesting is that while Microsoft is a great company that makes a ton of money, what that compensation pool will look like if the country goes into a deep recession, and people start getting laid off from their jobs.
While it will be the contractors who will be the first to go at Microsoft, if it gets as bad as the technology bubble bursting in 2000/2001, this might become a huge albatross round the necks of Microsoft corporate management. This will not be a matter of right or wrong, this will be a matter of appearances, and if it looks like the company is being slowly looted, the crisis in confidence of senior management might drive the stock price down. Not that the stock price has really gone anywhere in the last five years.
This is not a matter of money, or a fully funded pool, retirements or anything else, this is all about the coming backlash against senior executives, the Wall Street effect is going to hit a lot of companies in the next year. If executive compensation seems or even gives the appearance of being out of whack when there are people unemployed, the backlash will be social. It is that social backlash that will have a greater impact on Microsoft going forward than anything else.
This might become as big a deal as “towels” as a rallying cry for the troops, especially if Microsoft starts cutting back on employment or starts firing people in a massive draw down. People will be looking at that 20 million per person cap, thinking that if you pay someone + taxes some 160,000 dollars a year, you could keep employed 125 people. And if you use the 60 Billion that Microsoft made lately, and take the .035 percent of that total value, there is some 2.1 billion dollars there, which means you, could keep employed 13,125 people for the value of that fully funded compensation package.
Update: News on numbers - math might be off, if I use the math as shown above, the numbers come to much less, .035% is 3.5% of 60B, or is it less than 1% at .0035%, according to the 8K it is .035% or 3.5% of the total value, then the numbers stand - if it is > 1%, the numbers are way off, and we are looking at 12.5 people and 1,313 (rounded up) jobs that would be saved by removing the executive compensation package.
Tags: Microsoft, 8k, compensation package, senior executive, money, economy, slowdown, employment
I think you’re off by a bit in your calculations:
60,000,000,000 (billion) * .035% ==
60,000,000,000 * .00035 = 21,000,000 (21 million)
Your point still comes across but it is only 131.25 people, unless I am misunderstanding something
Update: News on numbers - math might be off, if I use the math as shown above, the numbers come to much less, .035% is 3.5% of 60B, or is it less than 1% at .0035%, according to the 8K it is .035% or 3.5% of the total value, then the numbers stand - if it is > 1%, the numbers are way off, and we are looking at 12.5 people and 1,313 (rounded up) jobs that would be saved by removing the executive compensation package.
Thanks Ryan, I reran the numbers, it all depends on how .035 is interpreted as either 3.5% or > 1% I updated the file, I would give you a prize for pointing that out, otherwise you will just have to take my thanks!