Executive Compensation - Microsoft's Risk-return Tradeoff


Code : GOV0006

Year :

Industry : Internet and e-commerce

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

Buy This Case Study

Abstract: In the corporate America, owners, co-founders and top executives have been compensated with stock options, a profit sharing concept since the 1800s.

Microsoft has extended stock options to the rank-and-file employees since its public offering in 1986. During the IT boom, when Microsoft's stock prices soared, stock options had created the so called 'Microsoft millionaires'.

Stock options helped create a culture of employee ownership and entrepreneurial spirit. But with the decline in stock prices and growing anguish among employees, Microsoft shifted to restricted stock. The pay package was also seen as maintaining a balance between shareholders and employees' interests

Pedagogical Objectives:

  • To discuss the accounting, human resource and corporate governance perspectives of the shift in the compensation strategy by Microsoft.

    Keywords : Corporate Governance Case Study, Employee stock options, Microsoft's stock options, Restricted stock options, Expensing options, Profit sharing concept, Executive compensation, FASB (Financial Standards Accounting Board), Wealth sharing concept, Microsoft millionaires, Underwater stock options, Non-qualified options, Cost of options, Capital gains, Pay for performance

    Contents :
    » Stock Options: The Birth and the Death
    » Restricted Stock Options – Microsoft’s Initiatives

    Case Introduction >>

    Recently Bought Case Studies

      Recently Bought Case Studies

  • Contact us: IBS Case Development Centre (IBSCDC), IFHE Campus, Donthanapally, Sankarapally Road, Hyderabad-501203, Telangana, INDIA.
    Mob: +91- 9640901313,
    E-mail: casehelpdesk@ibsindia.org

    ©2020-2025 IBS Case Development Centre. All rights reserved. | Careers | Privacy Policy | Terms of Use | Disclosure | Site Map xml sitemap