- Today, we're gonna talk about Microsoft compensation
specifically for new hires,
or those of you who have recently joined,
or perhaps you are planning to join or looking at an offer.
This video will really provide you with an overview
of Microsoft compensation and how it works
in those first couple of years of employment.
With that being said, we do have a quick disclaimer,
and we're moving on.
So let's start with the basics
of forms of compensation from Microsoft.
First off, you have your base salary.
That's given to you in cash on a monthly basis.
That's pretty straightforward.
And then we have annual cash bonuses.
These cash bonuses are paid out in September of each year.
If you recently joined Microsoft
or perhaps receiving an offer,
there very well may be a on-hire cash bonus.
These are typically paid out
within the first 30 to 60 days of employment.
However, I have seen bonuses in the past
that have been split up into two payments as well.
Again, it's just very dependent
on the offer that you have been given.
Lastly, we do have stock awards.
Again, we could have on-hire stock awards,
and then we have just regular annual stock awards
that are given to you.
The on-hire awards very well, and most likely will,
have a different vesting schedule
than these traditional annual type of stock wards.
And we'll get into those differences here in just a second.
So let's take a look at a timeline
for the first couple of years of a new hire at Microsoft,
and how these different forms of compensation
layer on top of one another.
So the first thing we have here is a hire date.
We have your salary starting,
and we also have potentially an on-hire cash bonus.
Again, I have seen on-hire cash bonuses
be paid out in two payments, but let's for this example,
just look at a one-time cash bonus payout.
On addition to that cash bonus,
we also have an annual cash bonus
that could be paid out in September.
Depending on when you join Microsoft,
you may or may not receive that,
but if you start at Microsoft
in the earlier part of the year,
there very well could be a September cash bonus for you.
We then have on-hire stock awards.
The typical vesting for these awards
is a 25% vest over four years.
So you wouldn't be receiving any of those
on-hire stock award shares until one year after employment.
We then have the regular annual stock awards.
Again, if you start earlier in the year,
you very well could have just a regular stock award
that would be starting in November.
An easy way to remember when those stock awards happen
is an acronym called FMAN,
so February, May, August, November of each year,
those annual stock awards are vesting.
That's typically 20% per year over a five-year time period.
Now we'll take a look at an example with some numbers
and we can compare side by side
how annual total compensation looks
in those first six years of employment.
In this example, we have a base salary of $195,000
and then we have a annual cash bonus of $39,000.
And those will remain constant throughout this time period.
So we can see by looking at the annual stock awards
that over time, those awards will make up a greater portion
of your total compensation as those grants
begin to stack on top of each other
as you receive those each year.
We then have, in the first year also, an on-hire cash bonus
in this example of $100,000, making up a large percentage
of our total compensation in year one.
And then for years two through five,
we have the on-hire stock awards
that, again, are making up a fairly large portion
on top of just the traditional stock awards.
And then there's a slight drop-off in year six.
But really what those on-hire stock awards do
and that on-hire cash bonus,
is it levels out your income, for the most part,
in years one through six.
Again, there might be a drop-off
just depending on how many stock awards you've received
and what those grants look like,
but for those first six years, compensation is pretty level,
which obviously is great for cashflow planning, et cetera.
I hope you found this information useful.
If you do have any questions
about your benefits or compensation,
feel free to follow us on LinkedIn or on YouTube,
or check out our dedicated Microsoft employee resource page
on our website at avieradvisors.com.
We post a ton of free educational content.
So again, we're here to help if you have any questions.
Thank you.