Follow us:

Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

April 2, 2008 at 4:15 PM

Updated analysis: Microsoft employees spending less on company stock

Readers more familiar with Microsoft’s Employee Stock Purchase Program than I am pointed out a better way to evaluate the data the company filed with the Securities and Exchange Commission earlier this week. I wrote that Microsoft employees, per capita, bought fewer shares of stock through the program in each of the past two years.

A better measure is how much they spent on Microsoft stock through the program, since employees elect to put a certain percentage of their paycheck toward the program; they don’t designate a specific number of shares they’d like to buy. Their spending, too, has declined.

Microsoft employee spending on the ESPP during the past three years was as follows:

2007: $5,857.41 per employee

2006: $5,906.37 per employee

2005: $6,425.96 per employee

I calculated this by dividing the total employee contribution for each year, as reported in this SEC filing, and dividing it by the number of employees Microsoft reported on June 30 of each year (listed here). Further scrutiny is welcome.

As you can see, the trend is in the same direction I identified in the earlier post. While the decline from 2006 to 2007 is not that big, what about the drop from 2005 to 2006?

As several readers noted, it’s hard to imagine why an employee who can afford to wouldn’t participate in the program. Even the most bearish employee can get an immediate 10 percent gain each quarter by selling their shares the day after they acquire them at 90 percent of market price through the program.

One suggestion is the average Microsoft salary could be decreasing as the number of international hires increases. That’s speculation and I don’t have data on U.S. vs. ex-U.S. Microsoft salaries. But we do know that Microsoft has been adding employees outside the U.S. at a faster rate (14.5 percent for the 12-months ended last July 2007) than its employment growth overall (10.6 percent for the same period).

Also, I think it’s fair to assume that regardless of regional salary differences, the types of jobs Microsoft is adding overseas are skewing toward lower-paying sales and marketing functions rather than the core product development work, much of which is still done in Redmond (though even those functions are performed globally). Recall that more than 60 percent of Microsoft’s sales now come from international markets, executives said at the company’s most-recent quarterly earnings report.

Comments | More in Financial, Microsoft, Recruiting


No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.

The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.

The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited content access is included with most subscriptions.

Activate Subscriber Account ►