Microsoft Compensation Philosophy
How is Microsoft's compensation philosophy changing over the year since Nadella became the CEO - is it actually competitive compared to other top companies possibly bettering some of them - I am especially talking about good to great performers not in the median.
Microsoft’s comp is weak af overall compared to the other big guys - they are a cheap company. Someone brought this up in an all hands to Satya and his answer was basically “you can leave if you want”. At least their stock is kicking ass.
Lmao I also heard about this
Lol
I'll summarize here the remaining of the comments on this thread: Microsoft employee:. Pay is as good as anyone else. Everyone working elsewhere that says they make more is lying. Ex-Microsoft employee: Got at least 30% salary bump when I left. Microsoft's pay is shit. What I know is that base and bonuses are competitive. Benefits are great. Where they're not competitive is with their hire grant of RSUs and their annual stock grants. Those are probably 2 to 3x smaller than the others.
Their base is also quite poor compared to other tech folks, but maybe more so for those who stayed there for several years while the rest of the market was getting major boosts in pay. I was shocked when I left that company and started getting offers. Microsoft is a great place to coast, have amazing work life balance and (unfortunately) get paid accordingly.
Great summary. I just want to piggyback on this and add that there are methods in place to fix comp for the top few percent (special stock awards), but lack of transparency around them make it irrational to account for it in TC evaluation.
Base is reasonable, bonuses are pretty solid, benefits are awesome, stock is okay due to appreciation but if you fully vest your sign on and haven't had SSAs along the way, the cliff is real. If the stock growth starts to plateau they'll need to increase the annual award quantities pretty soon (2x at most levels) imo. All in all I'd say they are competitive enough... If an industry hire from a smaller tech company or with a consulting background was receiving offers from Amazon and Microsoft at the same time, would Microsoft be competitive? Probably. Can Microsoft attract an Amazon l6 who got a 400k sign on at $5xx stock price and is now vesting 40% chunks @ $17xx? Probably not.
When I look at all new undergrad hires, most are from state universities and not many are from top private schools. PhDs are from top 50-200 and below mostly except MSR which hires researchers from world class talent pool and pays accordingly as they hired them at level 63 directly (very small of hires though). Except those very few, lots of them are PhD from foreign countries or non flagship colleges (eg no UIUC or UT Austin) and are hired as level 59-61. For experienced hires, they are mostly from small unknown companies or the likes of SAP and IBM. Many are from Amazon but most of companies in Seattle have so many ex-Amazonians anyway so it doesn’t mean much. But above number is minuscule compared to the folks we get from WIPRO, Infosys, Insight Global etc and people transferring from Microsoft India (much more) and China (to some degree). We also get huge number of direct hires from eastern Europe. Several eastern european manager do a recruiting trip to Eastern Europe for this. So the last paragraph is the secret weapon Microsoft has. It has a long history of hiring people cleverly for lower compensation and mobility restrictions (green card queue and visa). Microsoft is a mastermind at this and doesn’t need talents from other pool because this pool has much more talents who are willing to work for lower pay and longer hours for comparable skills. Why would Microsoft care about compensation increase knowing this? To senior leadership’s eyes, talent they get from this country is not worth the money. Whether you agree or not, it has been doing well to the eyes of share holders and leadership. Their assumption could be wrong but have we proved someone who worked or can work at big American corp such as Google or FB are more productive than someone we get from Microsoft India, Ukraine or Wipro? I personally think someone who was educated properly under US or Western European education system tends to provide some intrinsic value that cannot easily be quantified or evaluated but if managers don’t see them, the trend will keep skewing towards otherwise. Let’s see if Microsoft really starts suffering. I am curious to see that.
Great performers are always compensated well and competitively compared to top companies.