8-KMaterial Agreements

MICROSOFT CORP 8-K Report, Material Agreement (Jun 29, 2005)

Filed June 29, 2005For Securities:MSFT

Summary

This Microsoft Corporation 8-K filing from June 29, 2005, reports a material change in the compensation package for Kevin R. Johnson, Group Vice President of World Wide Sales, Marketing and Services. The primary focus for investors is the significant increase in his annual salary and bonus potential, as well as his participation in the Shared Performance Stock Award (SPSA) Program. These changes reflect the company's strategy to incentivize and retain key executive talent in critical revenue-generating divisions. While this filing is primarily administrative, it signals an investment in senior leadership to drive future sales and service performance. Investors should note the specifics of the compensation, including the target stock award, as it may provide insight into the company's performance expectations and management's alignment with shareholder value. The at-will employment status is standard and does not represent a change in risk for the company.

Key Highlights

  • 1Microsoft announced an increase in the compensation for Kevin R. Johnson, Group Vice President, World Wide Sales, Marketing and Services.
  • 2Mr. Johnson's new annual salary is $570,000.
  • 3He is eligible for an annual bonus ranging from 0% to 100% of his eligible salary.
  • 4Mr. Johnson participates in Microsoft's Shared Performance Stock Award (SPSA) Program.
  • 5His target SPSA award is 696,296 shares of Microsoft common stock.
  • 6The employment agreement is at-will, which is standard for executive positions.

Frequently Asked Questions

The main purpose of this 8-K filing is to report a material change regarding the compensation of a key executive, Kevin R. Johnson, Group Vice President of World Wide Sales, Marketing and Services.

Kevin R. Johnson's annual salary has been increased to $570,000. He is also eligible for an annual bonus of up to 100% of his salary and receives a target award of 696,296 shares under Microsoft's Shared Performance Stock Award (SPSA) Program.

This change is significant as it indicates Microsoft is investing in and retaining key leadership in crucial sales and service roles. The substantial stock award also aligns the executive's incentives with the company's stock performance, which can be viewed positively by investors.

No, Mr. Johnson's employment is at-will, meaning either Microsoft or Mr. Johnson can terminate the employment relationship at any time, with or without cause. This is a standard condition for executive employment.