Microsoft to pay execs who stay, pay those culled during reorg turmoil

Awards $60M to 8 execs on the same day that board okays retention payments

Microsoft handed out nearly $60 million in stock grants to eight executives on the same day it filed papers with the U.S. Securities and Exchange Commission (SEC) announcing that the board had authorized special incentives to keep senior management from jumping ship.

The awards, which ranged between 47,000 and nearly 600,000 shares, held a paper value of between $1.6 million and $19.9 million as of Friday's closing price.

The executives who received the stock grants were Kevin Turner, COO; Brad Smith, chief counsel; Eric Rudder, who heads the company's advanced strategy and research group; Tami Reller, marketing chief; Amy Hood, the firm's CFO; Lisa Brummel, its top human resources executive; Frank Brod, chief accounting officer; and Tony Bates, who now leads business development and evangelism at the Redmond, Wash. company.

Turner scored the largest grant of almost 600,000 shares, worth $19.9 million as of Friday, while Smith and Bates received the second- and third-largest awards of 464,000 and 225,000 shares, valued at $15.5 million and $7.5 million, respectively.

All eight executives received the stock grants on Sept. 19, the day that Microsoft's SEC filing said the board of directors had approved special retention stock grants. The new award plan took effect the same day.

The special awards are intended to ensure "continuity of key leaders during the transition to a new chief executive officer" and preserve the company's "competitive position by enhancing retention of key executives with critical skills of strategic importance," Microsoft's filing read.

Microsoft's current CEO, Steve Ballmer, announced last month that he would retire before Sept. 2014, after the technology giant selects a new chief executive.

The documents detailing the awards and the retention plan were made public by the SEC on Sept. 23.

It wasn't clear from the SEC filings -- either the announcement of the retention awards or the individual grants to Johnson, Smith, Bates and the others -- whether the newest stock grants were part of the move to hold onto the executives or simply standard awards given to its top tier.

But the grants fit the retention requirements in that their vesting periods exceeded the 30-month minimum: All the awards will vest over either a three- or four-year span. And the same-day retention bonus filing and the awards themselves was a good clue that, at the very least, some of the stock grants stemmed from the new rules.

Microsoft stock grant chart
Kevin Turner, Microsoft's COO and the company's highest-compensated executive for the 2012 fiscal year, received nearly $20 million in stock awards earlier this month.
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