$200,000 To Attend Nine Meetings

Today I received the Microsoft 2006 shareholders’ report. As a MS shareholder, I always enjoy reading how the company did. However, what I really enjoy reading is the proxy statement for the annual meeting of shareholders. The statement lays out where the meeting will be held, what will be voted on and tries to solicit my vote. The statement also discloses how much salary and bonus the executive team made. According to the proxy, both Billl Gates and Steve Ballmer made a based salary of $616,667 and a bonus of $350,000. That is actually low for a company the size of Microsoft. The highest paid executive was newly hired COO Brian Turner – he received total compensation of $16,162,876 ($7 million of that was a signing bonus).

What really caught my eye wasn’t how much the executive team made, it was how much a member of the Board of Directors made for attending a meeting. The Microsoft Board has 10 people in it.

  • Bill Gates
  • Steve Ballmer
  • James Cash Jr.
  • Dina Dublon
  • Raymond Gilmartin
  • Ann McLaughlin Korologos
  • David Marquardt
  • Charles Noski
  • Helmut Panke
  • Jon Shirley

The Board of Director hold regularly scheduled quarterly meetings. There are also quarterly committee meetings, which are held the day after the quarterly meeting. In addition to these meetings, there might be one or two special meetings. All together, the Board of Directors met nine times in 2006. How much does a director make for attending nine meetings?

  • $200,000 per year with $120,000 provided in the form of a stock award
  • Additional $10,000 for chairs of the five Board committees
  • Additional $10,000 for members of the Audit Committee
  • Reimbursement of “reasonable expenses” incurred in connection with board-related activities

In addition, to assist directors in developing an in-depth understanding of Microsoft’s business and products, directors are provided with a Tablet PC for their use while they serve on the Board. Each year, directors also may receive an additional personal computing device and a game or media player device, each with associated peripherals, and Microsoft software and subscription service with an aggregate value of less than $10,000.

That sounds like a pretty good gig! Make a minimum $200,000 to attend nine meetings! Of course, I am sure the Board has lots of important work to do at these meetings. However, the compensation seems extremely high. Other companies, of which I’m a shareholder of, don’t paid their directors anywhere near this much.

On another note, both Bill Gates and Steve Ballmer elected not to receive any compensation for being on the Board of Directors. Gee, How nice of them.


11 thoughts on “$200,000 To Attend Nine Meetings”

  1. Derrich says:

    Insane! That’s almost the same regret and…and…woe I felt when I read this article in Reuters about the Goldman Sachs guys. I think I’m in the wrong profession.

  2. John Chow says:

    Ya, that story about Goldman is just insane!

  3. Bryce says:

    I want to be on the Board of Directors. Gotta beat the $7.10/hr at Maccas 😀

  4. Nomar says:

    Damn, what is Bill Gates still doing there, if I was him i would buy me a island at Dubai and relax for the rest of my life !!! what a dream

  5. Dude says:

    Do you do all of your work in meetings? Every single working person I know– including me– does an insane amount of work to PREPARE for meetings. Board members certainly don’t do all their work at their meetings. I can’t say whether the work that the MS directors do is worth $200k, but it’s misleading to say that they are paid it to attend nine meetings. Particularly the audit committee directors, those guys actually do a lot of work, since nowadays their asses can be on the line for accounting controls/financial-related matters.

  6. John Chow says:

    I understand they must do a lot of work to prepare for a meeting. I’m just saying $200K to be a director of a company is very high compared to some of the other companies that I had held stocks in. Most of them pay $10,000 to $50,000 a year.

  7. slasher says:

    Nomar: No, you wouldn’t. And if you retired after making all this money to live on some island, I’m afraid you will never be financially successful. These executives and a lot of really successful people aren’t doing their jobs for the money anymore. It’s like the saying goes: “After you make the first million, money doesn’t mean a whole lot anymore.” Considering there are only 990K millionaires in the US, I would say the saying is pretty true.

    So what do you plan to do after buying the island? If you are Bill Gates, you can buy a few islands, a new Ferrari everyday for the rest of your life, a few mansions and then what? Sip drinks and relax on the beach. You are willing to sit on the beach and sip drinks for the rest of your life. Wow, talk about leading a boring life. Ever heard of life/work balance? If you continue to work without ever taking a vacation, you will burn out regardless of how much you enjoy your work. Similarly, if you are on vacation for years on end, you will get tired of it as well. I’m sorry to say this, but your dreams are messed up.

    Those of you who dream making $200K by being on the Board of Directors on a company like MSFT, keep dreaming. I hope you realize the pressure it takes to be on a BoD of a multi-billion dollar company.

    I love it how people jump on news stories (like the Reuters story above) where it talks about making millions per year, but you don’t realize the pressure and responsibility for that job.

    Get this: an average 24-year old analyst on Wall Street makes easy 6-figures per year + bonus if he is qualified, but these guys work 14-18 hours a day under hardcore pressure that av average person can’t handle. Not to mention, analysts have to be on call 24/7, so some days you are back to work fully dressed ready to discuss things after getting 3 hours of sleep. Yea, making 6-figures is great right out of college and you get to network with a lot of influential people that can further boost your career when you retire from Wall Street, but again, the margin of error on Wall Street is right next to zero. If you think these analysts get to enjoy spending money, you are sorely mistaken.

    A lot of rich and successful people have gotten to where they are because they have put a lot of hard work and dealt with a lot of highly stressful situations. There’s a reson why an average analyst only lasts three-four years on the Street.

    I love to hear morons cry who work at Wal-Mart about how crazy their last week was and their dreams of working as a CEO, making enough money and retiring early to enjoy life. Yeah, sure … keep dreaming. I only wish people would post more insightful comments to inspirational blog posts such as this one.

  8. Dude says:

    Right, thanks for the clarification. Yeah, 200k does seem like a lot for a board member; probably most smaller companies are in the range you mention. But it’s actually comparable to non-management director comp at other really large companies — think Walmart, Cisco, Ford, GM, etc. Directors at those companies are in the $150k-$250k range.

  9. Harry says:

    Slasher said it all, except that 120k in stale Mr Softy stock ain’t no prize.

  10. slasher says:

    Harry:

    Thanks for the compliments. I agree with your MSFT stock price assessment, though it has gone up about 22 percent from its 52-week low in the last few months, plus like a lot of employees and executives, I’m sure they get discounts on the stock price. 🙂

  11. Rich says:

    slasher is so on the money with the Wall Street jobs. Been there, done that for a year as M&A analyst and it was enough for me… But then I could travel for more than two years with all the money left untouched from my bonus;)

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