MSFT » Topics » Assessing Performance and Determining Compensation - Other Named Executive Officers

This excerpt taken from the MSFT DEF 14A filed Sep 29, 2008.

Assessing Performance and Determining Compensation – Other Named Executive Officers

Target Compensation.     At the beginning of fiscal year 2008, the Compensation Committee approved the target total direct compensation (consisting of base salary, target annual cash bonus opportunity, and target equity awards) for our named executive officers (with the exception of Mr. Ballmer, whose compensation is determined as described above), based on the following factors:

 

   

the named executive officer’s role and responsibilities,

   

an assessment of compensation practices at our peer group companies for similar positions,

   

internal comparisons of the named executive officer’s total compensation to the total compensation of other executive officers, and

   

the recommendations of its compensation consultant.

 

 

14  /  MSFT   2008 PROXY STATEMENT

 


 

 

Actual Compensation.    Following the end of fiscal year 2008, the Compensation Committee approved base salary adjustments for our named executive officers, as well as the amount of each officer’s annual cash bonus for the just-completed fiscal year, and the amount of his discretionary restricted stock unit awards (called Performance Pool SPSAs) after considering:

 

   

an evaluation of the named executive officer’s performance for the just-completed fiscal year, as prepared and conducted by Mr. Ballmer and supported by performance evaluation documents (including a self-evaluation provided by the named executive officer and written feedback and ratings from his peers, direct reports, and other employees within his division or group),

   

Mr. Ballmer’s recommendations, and

   

other information described below on page 18.

As part of the compensation-setting process following fiscal year 2008, the Compensation Committee also reviewed tally sheets prepared by our Human Resources division that set forth each named executive officer’s historical earnings, the value of his outstanding and unvested equity awards, his current holdings of Microsoft common stock, any perquisites and benefits, and, if applicable, any potential severance payments and benefits.

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