Microsoft took another step toward middle age, shifting a significant piece of its employee compensation from stock to cash, implicitly acknowledging that its stock performance isn't enough to retain top talent.
CEO Steve Ballmer sent an e-mail to the company's 90,000 employees this morning, outlining a new compensation and review process. The company is significantly scaling back its stock awards for employees, replacing that with cash. And it's revising the complex review system in an effort to create a much clearer link between performance, rating, and compensation.
"Our ability to deliver great value to our billions of customers is driven by the ideas and passions of our employees," Ballmer wrote. "Through our history, we have been THE place people came when they wanted to make a difference in the world through software, hardware and services."
The changes seem to recognize the lure of younger tech companies that draw the kinds of employees Microsoft once did. While Microsoft remains a top spot for college grads, recruiting tables for Google and, more recently, Facebook often draw larger crowds.
Through the late 1990s, Microsoft was minting millionaires with its stock-option program. But as Microsoft has matured, compensation has been a core gripe for employees. The legend of the "Microsoft millionaire" is the stuff of corporate history books these days. Microsoft's shares have traded sideways for most of the last decade. Employees have been working for a paycheck and little else.… Read more