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Microsoft Raises Cash Compensation For Employees

April 22, 2011

Microsoft Corp. said on Thursday that it would boost cash compensation for employees amid tightening competition for high-tech workers, Bloomberg reported.

“For all employees, we will shift a portion of stock award targets into base salary, providing more cash up front,” wrote Microsoft CEO Steve Ballmer in a memo to all employees Thursday morning.

Like other Silicon Valley companies Google and Yahoo, Microsoft may be losing top workers to newer, hyper-growing startup companies such as Facebook, and must improve the way it rewards and support its most talented workers, Ballmer said.

“Through our history, we have been THE place people came when they wanted to make a difference in the world through software, hardware and services,” Ballmer said in the memo, which was obtained by Bloomberg and Reuters.

“This is as true today as it has been at any time in our history, and the changes we’re rolling out today will help ensure Microsoft continues to be the place that top talent comes to change the world.”

Microsoft’s move follows Google’s decision to give its employees a ten percent pay raise this year. 

Microsoft said it plans to further boost compensation for divisions with fast-moving markets, including research and development and certain locations throughout the world.

According to Ballmer’s memo, all Microsoft employees will have part of their stock awards shifted into base salary.

Shares of Microsoft’s stock have remained roughly flat since mid-2009.

The company said it would link bonuses and stock awards more closely to performance, with the review process also undergoing changes beginning in September, Ballmer said.

Microsoft’s stock fell 24 cents, or 0.93 percent, on Thursday, closing at $25.52.

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