Microsoft Pays Executive $14 Million To Not Work for the Competition for a Year


Editor in Chief
Staff member
Jan 5, 2011

Here's a story that proves some folks just live in a completely different world than the rest of us. Last November, Lead Windows exec, Steven Sinofsky resigned (was indirectly pushed out) from Microsoft. At the time of his departure, Microsoft gave him a generous exit bonus of $14 Million in stock options, which he would have vested if he had stayed with the company. This also happened to be a "non-compete" payoff agreement.

Microsoft effectively paid Sinofsky $14 Million to simply NOT work at their seven biggest competitors: Amazon, Apple, EMC, Facebook, Google, Oracle & VMWare. This agreement ends on December 31st, 2013, at which time he can then work for any of these companies. The other stipulation was that he could not disparage Microsoft, nor solicit Microsoft employees for work at other companies. He was also restricted from encouraging Microsoft customers to choose competitors’ products.

So, basically Microsoft wasn't too thrilled with his performance, and didn't offer him the promotion he wanted. They knew he wouldn't like this, thus facilitating his voluntary resignation. In the end, they basically gave him $14 Million in stock options for him to sit on his butt for a year before he can go work for their competitors. The average joe is lucky to get a one month severance package while being escorted to the door by security.

This is pretty standard stuff in silicon valley, and we have heard stories like this before. Still, it's interesting to see the details on the numbers involved in agreements like this.

It appears that some parachutes really are made of gold.

Source: AllThingsD