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MICROSOFT RETHINKS EXEC RELOCATION

Steve ElopCall it the Steve Elop rule after the executive who left Microsoft last month to become CEO of Nokia. Apparently people other than me raised eyebrows and a bunch of other body parts about Microsoft’s having paid former Microsoft Business Division president $6.5 million for his house, a number that includes a $1.4 million tax gross up. Elop, who was with Microsoft for two years, had a deal under which the company agreed to pay the difference between what he paid for the house and the appraised value, which was appraised after property values fell dramatically.

A post from John Seethoff, Vice President and Deputy General Counsel, which was filed with the SEC, said that, “Based on additional input from several shareholders and our ongoing review of our policies, we are now taking additional steps to reduce the company’s exposure on relocation costs by including reasonable caps on the total relocation benefit that would be paid to an executive officer.” I was going to say Microsoft got hosed. But in the words similar to those of a current commercial, “Hosed? They got power washed. Big difference.” Microsoft will also now match the recovery period for relocation costs with the three-year recovery period for bonuses. Elop had to give back $667,000 of his signing bonus because he only stayed two years. Seethoff’s comments represent a sharp contrast with those of the company’s proxy which called the agreement fundamentally fair to both parties.
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