Mini Case Studies - MSFT & GE - 2011

Mini Case Studies- - Mini Case Studies Microsoft GE Changes in Compensation Policy 1 2 Microsoft Background Historically had one of largest

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1 Mini Case Studies Microsoft & GE: Changes in Compensation Policy
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3 Microsoft – Background Historically had one of largest employee stock option plans Analysts estimate 1/3 of permanent workers in 1999 are millionaires! Over the past 10 years, stock price less than half of all-time high ($60) in 1999 Early 2000s: Many/most of options held by employees are underwater if do nothing, could lead to morale problems
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4 What to Do? 2002 CEO Steve Ballmer meets with J.P. Morgan to sell software, conversation turns towards MSFT compensation policy July 2003, MSFT announces employees may sell underwater outstanding options to J.P. Morgan Also, in future, all 50,000 employees will receive grants of restricted stock (no more option grants!)
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5 Microsoft’s Stock Plans (taken from 2004 10-K). In fiscal 2004, we began granting employees stock awards instead of stock options. The stock award program offers employees the opportunity to earn shares of our stock over time, rather than options that give employees the right
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This note was uploaded on 01/02/2012 for the course FINANCE 347 taught by Professor Bayou during the Fall '11 term at NYU.

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Mini Case Studies- - Mini Case Studies Microsoft GE Changes in Compensation Policy 1 2 Microsoft Background Historically had one of largest

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