8-KLeadership ChangesExhibits & Filings

MICROSOFT CORP 8-K Report, Executive Changes (Apr 13, 2006)

Filed April 13, 2006For Securities:MSFT

Summary

Microsoft Corporation (MSFT) filed an 8-K report on April 13, 2006, primarily announcing the appointment of Frank H. Brod as its new Corporate Vice President, Finance and Administration, and Chief Accounting Officer, effective May 1, 2006. Mr. Brod's extensive experience, including his previous role as Corporate Vice President and Controller at Dow Chemical Company, positions him to oversee critical financial functions. This appointment is significant for investors as it brings a seasoned executive into a key financial leadership role. The filing details Mr. Brod's compensation package, which includes a competitive base salary, performance-based bonus, stock awards, and a signing bonus, reflecting the company's investment in top talent. The terms of his employment and potential clawbacks on bonuses and stock grants if he departs prematurely offer insights into retention strategies and the company's commitment to securing his long-term contribution.

Key Highlights

  • 1Appointment of Frank H. Brod as Corporate Vice President, Finance and Administration, and Chief Accounting Officer, effective May 1, 2006.
  • 2Mr. Brod brings significant prior experience as Corporate Vice President and Controller at Dow Chemical Company.
  • 3Base salary of $411,000 per year for Mr. Brod.
  • 4Eligibility for an annual cash performance bonus ranging from 0% to 120% of eligible salary.
  • 5Target Shared Performance Stock Award (SPSA) of 25,000 shares, with actual award size dependent on company performance.
  • 6A signing bonus of $300,000 is included, with specific repayment clauses based on tenure.
  • 7An on-hire stock grant of 35,000 shares with a multi-year vesting schedule is provided.

Frequently Asked Questions

Frank H. Brod is the newly appointed Corporate Vice President, Finance and Administration, and Chief Accounting Officer of Microsoft Corporation. He joins the company on May 1, 2006, and will be responsible for key financial and administrative functions. He previously served as Corporate Vice President and Controller at Dow Chemical Company.

Mr. Brod will receive a base salary of $411,000 annually, a signing bonus of $300,000 (paid in installments), and is eligible for an annual cash performance bonus (0-120% of salary). He will also receive a target Shared Performance Stock Award of 25,000 shares and an on-hire stock grant of 35,000 shares with a multi-year vesting schedule. Additionally, he is eligible for executive relocation benefits and a $450,000 relocation allowance.

Yes, there are conditions. The signing bonus has repayment clauses: $200,000 must be returned if he leaves voluntarily or is terminated for cause before one year, and the remaining $100,000 must be returned if he leaves under similar circumstances between one and two years of employment. The on-hire stock grant vests over his first five years of employment, and the relocation allowance is subject to forfeiture if he leaves voluntarily before completing 24 months.

The appointment of a Chief Accounting Officer is a crucial role overseeing financial reporting integrity and controls. Mr. Brod's experience at a major corporation like Dow Chemical suggests Microsoft is bringing in experienced leadership for its financial operations. The detailed compensation package also signals the company's commitment to attracting and retaining key financial talent, which is fundamental for investor confidence and stable financial performance.