Microsoft Corporation (NASDAQ:MSFT) has authorized the payment of special incentives to retain the executives. Directors of the company have given their approval to a new type of stock grant in certain areas where it wants to maintain the “continuity of key leaders during the transition to a new chief executive officer,” according to a Securities and Exchange Commission (SEC) filing released Monday.
Details of the executive eligible for such incentives were not given in the filings.
Probable Reasons behind stock incentives
The incentives given to the executives will be in the form of stock, and will range from 25 percent to 150 percent of the recipient’s annual target compensation. Microsoft already pays cash bonuses and stock awards to its top line executives each year.
Companies in the past have also resorted to providing incentives while in the process of hunting for a new CEO. However, Microsoft Corporation (NASDAQ:MSFT) says providing such incentives is an indication that the company is fearing executive discontent or employee unhappiness during this phase.
There can be various other possibilities pertaining to providing special stock grants to executives. Stock might also be an award to acknowledge the “sustained exceptional performance” and to hold onto “key executives with critical skills of strategic importance.”
On Monday, Microsoft Corporation (NASDAQ:MSFT) also announced the name of many senior executives who were awarded stock grants; Kevin Turner, chief operating officer was awarded approximately 600,000 shares valued at $19.6 million at Monday’s market close. Another topline executive, General Counsel’s Brad Smith, received shares worth $15.2 million, the bulk of which was considered as a “special” stock award, according to an SEC filing.
Microsoft still not decided on new CEO
In the previous month, Steve Ballmer stated that he would step down from the post of CEO as soon as the company decides upon the new CEO, which will take around a year. However, many observers and employees think that Microsoft Corporation (NASDAQ:MSFT) will be at a loss due to delays in the process of appointing new CEO.
Recently, while giving presentations to Wall Street analysts, Amy Hood, chief financial officer, said that there was no further update on the ongoing CEO Search for Microsoft. She said this while giving a presentation in Microsoft’s campus close to Seattle, which was broadcast on the Web.
Company watchers are bidding on several company topline executives who could be the next CEO, but there has not been any mention in the filing.