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  #1  
Old 10-22-2014, 08:50 AM
Dru Edwards Dru Edwards is offline
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Default Microsft CEO made $84M this year

Microsoft's new CEO, Satya Nadella, made $84M this year. That includes:
  • $59.2M in shares ("potentially worth 59.2", I guess it depends upon the stock value?)
  • $13.5M in retention award
  • $ 1.2M base salary (that's for this year, didn't state for last year)
  • $$ Misc

Just stunning the amounts of money out there and the base salary for CEOs can be so misleading. I hope the shareholders are getting a great ROI. I don't own MSFT stock so I have no voting rights on this, lol.

What are your thoughts?

http://www.telegraph.co.uk/technolog...y-package.html
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  #2  
Old 10-22-2014, 09:10 AM
jpd jpd is offline
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Default What are your thoughts

I tip my cap to 'em! I hold no ill will against someone that succeeds monetarily........it's the foundation of free enterprise.....the only nasty part is the people that get trampled by the climbers!
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Old 10-22-2014, 09:17 AM
callouses callouses is offline
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Sounds to me like it's not as though they just dumped a lot of cash on top of him, it's in the form of stock in the company, which puts the ball in his corner to make the company perform, in order to get the maximum benefit for himself. What's wrong with that? Much of it is performance based. He's getting it because they have confidence that he will make things happen. If he doesn't, then he shouldn't get it. It's not the same as increasing his take-home 11 times, which is how they make it sound. The stock has to increase in value for him to get most of it. I think I'd still like to walk behind him with a wheelbarrow, though, in case he drops some.
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Old 10-22-2014, 09:24 AM
Jim_G Jim_G is offline
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Dude should think about buying some new clothes. I've been better dressed guys at the Bowling Alley. Maybe that will inspire Pearl Jam to do likewise. I don't know what it is about Seattle Fashion, but it ain't working. Especially on Middle Age White Guys.
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Old 10-22-2014, 09:38 AM
buddyhu buddyhu is offline
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I can't help but wonder what he would be paid if the general ideas about the principles behind Billy Beane's "Moneyball" were applied to the CEO's of big corporations. I have no doubt that he and other big CEO's have some skills and insights and knowledge that are valuable. But is it possible that a corporation be better off hiring a couple of experienced "journeymen", and letting them share job duties/play as a platoon, and paying them less overall? I have to think "yes". Just IMO, of course.
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Old 10-22-2014, 10:52 AM
Dirk Hofman Dirk Hofman is offline
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Quote:
Originally Posted by callouses View Post
Sounds to me like it's not as though they just dumped a lot of cash on top of him, it's in the form of stock in the company, which puts the ball in his corner to make the company perform, in order to get the maximum benefit for himself. What's wrong with that? Much of it is performance based. He's getting it because they have confidence that he will make things happen. If he doesn't, then he shouldn't get it. It's not the same as increasing his take-home 11 times, which is how they make it sound. The stock has to increase in value for him to get most of it. I think I'd still like to walk behind him with a wheelbarrow, though, in case he drops some.
There's quite a difference between a stock "grant" and stock "options". Options are incentives. Grants are free money in the form of stock, which he can liquidate or not.
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Old 10-22-2014, 11:10 AM
callouses callouses is offline
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Quote:
Originally Posted by Dirk Hofman View Post
There's quite a difference between a stock "grant" and stock "options". Options are incentives. Grants are free money in the form of stock, which he can liquidate or not.
OK, but maybe I'm confused. Paragraph 2 calls it "granted" while paragreaph 4 says he must perform. However you interpret that, thank for the clarification.
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Old 10-22-2014, 11:37 AM
Dirk Hofman Dirk Hofman is offline
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...........

Last edited by Dirk Hofman; 10-22-2014 at 04:23 PM.
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Old 10-22-2014, 02:52 PM
aknow aknow is offline
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The only CEO's salaries I have a problem with are mega-insurance company CEO's. Underpay those who provide the service so they can complicate, shuffle unnecessary paperwork, and overprice healthcare. Microsoft can pay him a billion a year, I don't care.
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Old 10-22-2014, 03:41 PM
HHP HHP is offline
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What was the total earnings of everyone who works for him?
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  #11  
Old 10-22-2014, 03:54 PM
harmonics101 harmonics101 is offline
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Quote:
Originally Posted by aknow View Post
The only CEO's salaries I have a problem with are mega-insurance company CEO's. Underpay those who provide the service so they can complicate, shuffle unnecessary paperwork, and overprice healthcare. Microsoft can pay him a billion a year, I don't care.
Totally agree, if you are someone that produces a good that can benefit efficiency, is a commodity, a service.

Stock brokers and insurance companies do not fall into that category,

H
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Old 10-22-2014, 04:24 PM
callouses callouses is offline
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Quote:
Originally Posted by Dirk Hofman View Post
Sorry for the brevity, I didn't offer a good explanation. There is theoretically some incentive to a stock grant, but at the amounts in question, practically there is none. Let me try and offer a general explanation of the differences. There are many flavors of how each might be structured, but this is a basic structure for each.

Stock options work as follows. You are given a certain amount of "options" in a pre-IPO company, which Microsoft is not. Say you work at a startup, and you get 100,000 options. This would be a lot, though value of options varies wildly. Typically at the VP level they would give you 1-2% of the company. The options typically vest over 4 years. You get your first vesting at 1 year, then monthly after that. Meaning if you leave before 1 year you get no options. Your price for those options is set at the theoretical value of the stock, which in the case of a pre-IPO company is usually quite low. Say for for example you have 100,000 options at a strike price of .10 cents. Unless that company is bought or goes IPO, you will never see a dime. You are massively incentivized to make that company do well, as your salary is generally quite a bit lower than if you didn't have the options. High risk, high reward. As it should be. If it does go IPO or sell, and say the value of each share at purchase or IPO was set at $1, you have the option to buy your 100,000 shares at .10 cents, and if you liquidate at that moment (sell it all) you will make 90,000. 100,000 X $1 - the cost of your options ($10,000). If the price at IPO is $10, you would make $900,000 and so on. This all assumes you're fully vested after the 4 year period.

This is incentive.

A grant works as follows. It is generally done in more mature, post-IPO companies like Microsoft. You start work at a company and are given a grant of say $1,000,000 in options. That would be a LOT more than say an engineer or even a VP, but not a lot for a CEO at a company this size. Just a round figure to illustrate the concept. At some point in your first months, a strike price is set. Say it's $100. Usually you're given a 15% discount on the actual price, so your real price is $85. This is also generally done on a 4 year vesting schedule. After your price is set, your purchase happens, and you get in this case 11765 or so shares of stock. So if over the 4 years, the price never moves, and if you decide to sell all at the end of 4 years, you made $176,500 over and above the grant of $1,000,000 just from the 15% discount for a total of $1,176,500. This would actually vest in increments over the 4 years, so you would get a quarter of that grant in your first year, etc. So if during your tenure, you did a horrible job as CEO, and tanked the stock 15%, you would still get $1,000,000.

At $59.2 million for the grant, what is the downside? I totally hork the company and still walk with $40 million after 4 years?

So yes, you're tied to performance, but at these figures any "incentive" is fairly theoretical. With options, it's completely different. Company tanks and no one gets anything because there's no purchase or IPO.

Hope that was a decent enough explanation.
Yeah, thanks, that helps. So it would behoove the board to know who they're voting in. I agree, that pay especially at that level, should be performance based. I don't care if you make 80 mil a year, if you earn it. I think of my old employer, fedex. Fred Smith started that company doing the first sort on a card table, so the story goes. It's gone through a lot of changes over the years, but i believe he cares what happens to that company, and as ceo he oversees things quite well. I don't begrudge him a dime of what he makes, because he climed long and hard to get there, and everyone under him benefits, as long as they produce, as you said, the way it should be,
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  #13  
Old 10-22-2014, 04:35 PM
Glennwillow Glennwillow is offline
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That's a lot of guitars, huh?

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  #14  
Old 10-22-2014, 04:37 PM
D. Shelton D. Shelton is offline
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Quote:
Originally Posted by Dru Edwards View Post
Microsoft's new CEO, Satya Nadella, made $84M this year. That includes:
  • $59.2M in shares ("potentially worth 59.2", I guess it depends upon the stock value?)
  • $13.5M in retention award
  • $ 1.2M base salary (that's for this year, didn't state for last year)
  • $$ Misc

Just stunning the amounts of money out there and the base salary for CEOs can be so misleading. I hope the shareholders are getting a great ROI. I don't own MSFT stock so I have no voting rights on this, lol.

What are your thoughts?

http://www.telegraph.co.uk/technolog...y-package.html
$84,000,000 is nowhere near enough !!

There should be way more wealth imbalance, overall , and maybe enough of us average schmucks will die off from disease or starvation so that the tenth or hundredth percenters can finally live the way they deserve to , without all the little people griping and moaning. Not that they listen anyway.
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  #15  
Old 10-22-2014, 04:54 PM
duff beer duff beer is offline
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It's a private company, so they can pay him whatever they want. Those who don't agree are free to shop elsewhere, or start up their own computer and software company.
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