Microsoft Investor Relations - Stock Ownership and Holding Requirements for Microsoft Corporation Executives

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Stock Ownership and Holding Requirements for Microsoft Corporation Executives

Updated: September 14, 2010

The Compensation Committee of the Board of Directors (“Compensation Committee”) believes that Microsoft Corporation (“Company”) executive officers and certain other executives should maintain a material personal financial stake in the Company to promote a long-term perspective in managing the enterprise and to align shareholder and executive interests. The executives who are subject to this policy are the Company's executive officers and other executives who have been designated as participants in the Company's Executive Incentive Plan (collectively, "covered officers"). The Compensation Committee has adopted formal stock ownership and holding requirements whereby each covered officer is required to maintain the following minimum equity stake in the Company.

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Microsoft Corporation Corporate Governance Fact Sheet

Role	Minimum ownership	Holding requirement
CEO and Executive Chairman	10x base pay	Each covered officer must retain 50 percent of all net shares (post tax) that vest on or after October 1, 2007, until the minimum share ownership requirement is achieved. If the covered officer is promoted to a position that has a higher ownership requirement, the higher standard will apply, and 50 percent of net vested shares should be retained until such time that the ownership requirement is met.
Division presidents and COO	5x base pay
Other Covered Officers	3x base pay

Minimum share ownership levels will be determined annually by using covered officer base pay multiples, base pay rate as of the end of the fiscal year (June 30), and the average daily closing share price of the 12 months ending on June 30. Compliance with the requirements will be assessed annually and covered officers will be notified about their ownership requirement, current holdings, and whether additional shares must be held.

For the purposes of determining ownership levels, the following forms of equity interests in the Company count toward the stock ownership requirement:

Shares held outright by the covered officer, whether acquired through open market purchase, vesting of Stock Awards or Shared Performance Stock Awards, or stock option exercise, or purchased through the Employee Stock Purchase Plan.

Shares held by the spouse or dependent children of the covered officer.

Shares held in trust for the economic benefit of the covered officer, or the spouse or dependent children of the covered officer.

Shares held in a 401(k) plan.

Exceptions to these share ownership and holding requirements may be made at the discretion of the Compensation Committee if compliance would create severe hardship or prevent a covered officer from complying with a court order e.g., as part of a divorce settlement.

Related Information

Corporate Governance Fact Sheet

Corporate Governance FAQs

Microsoft Finance Code of Professional Conduct

Microsoft Standards of Business Conduct

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