Letter from our Independent Chairman and our CEO
October 19, 2015
We invite you to attend the Annual Shareholders Meeting of Microsoft Corporation (“Annual Meeting”), which will be held at Meydenbauer Center, 11100 NE 6th Street, Bellevue, Washington 98004, on December 2, 2015 at 8:00 a.m. Pacific Time. Doors open at 7:00 a.m. We will feature a Microsoft Store at our product showcase to give you the opportunity to experience Microsoft’s latest consumer products including the latest devices running Windows 10. Driving directions to Meydenbauer Center are available on the “Resources” page. Parking will be validated only for Meydenbauer Center garage. Parking is limited, so plan ahead if you are driving to the meeting.
The attached Notice of Annual Shareholders Meeting and Proxy Statement contain details of the business to be conducted at the Annual Meeting.
Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. We urge you to promptly vote and submit your proxy via the Internet, by phone, or by signing, dating, and returning the enclosed proxy card in the enclosed envelope. If you attend the Annual Meeting, you can vote in person even if you previously submitted your proxy.
This year’s shareholder question and answer session will include both live questions and questions submitted in advance. You may submit a question in advance through the Shareholder Forum available at www.theinvestornetwork.com/forum/msft/default.aspx; we will respond to as many inquiries as time allows.
We again are offering a virtual shareholder meeting through which you can view the meeting, submit questions, and vote online, at microsoft.onlineshareholdermeeting.com. We will also provide a live webcast of the Annual Meeting from the Microsoft Investor Relations website at www.microsoft.com/investor. A transcript with video and audio of the entire Annual Meeting will be available on the Investor Relations website after the meeting. We hope this will allow those who cannot attend the meeting in person to hear Microsoft executives discuss the year’s results and our plans for the future. In addition, we make available at our Investor Relations website a variety of information for investors. Our goal is to maintain the Investor Relations website as a portal through which investors can easily find or navigate to pertinent information about us.
On behalf of the Board of Directors, thank you for your continued investment in Microsoft. We look forward to greeting as many of you as possible.
Chief Executive Officer
|John W. Thompson
Letter to our Shareholders from the Board of Directors
October 19, 2015
As stewards of Microsoft, the Board of Directors greatly values its engagement with our shareholders. With this proxy filing, we would like to highlight several changes in 2015 that demonstrate our ongoing commitment to a strong corporate governance framework that incorporates input from our shareholders.
Incentive compensation changes
The evolution of executive compensation for fiscal year 2016 and beyond reflects a shift to more performance- based compensation. This change began with the compensation structure developed for Satya Nadella when he was appointed as our chief executive officer in February 2014. A significant performance element was included in the form of a one-time long-term performance-based stock award that provides additional equity compensation to Mr. Nadella if he successfully implements our business transformation and creates sustainable long-term value for shareholders.
Through our ongoing shareholder engagement, we received feedback that shareholders favor incentive compensation tied to specific performance measures that are aimed at driving long-term performance and value creation. We implemented these arrangements in the changes we made to the senior executive compensation program for fiscal year 2016. As described in the proxy, we have created long-term incentives for our executive officers that use performance measures aligned to the evolution of Microsoft’s business models and objectives.
Acting in line with Microsoft’s long-standing corporate governance philosophy, the Board adopted a new “Proxy Access for Director Nominations” bylaw that permits eligible shareholders to nominate candidates for election to the Microsoft Board. Our decision to adopt proxy access grew out of an open and constructive dialogue with our shareholders, and we believe this proxy access framework strikes the right balance for Microsoft by ensuring that Board nominees are supported by long-term shareholders representing a significant, but attainable, proportion of outstanding shares. For additional information, please see the “Corporate Governance” section of the proxy.
We regularly add directors to infuse new ideas and fresh perspectives into the boardroom. In recruiting directors, we focus on how the experience and skill set of each individual complements those of their fellow directors to create a balanced board with diverse viewpoints and backgrounds, deep expertise, and a strong technology- specific knowledge base to lead our business into the future. Accordingly, we are pleased to announce the nominations of Sandra Peterson and Padmasree Warrior for election to the Board at our December 2 Annual Meeting. Both are accomplished business leaders with significant experience directly relevant to Microsoft’s strategic vision and business strategies. Sandra Peterson is Group Worldwide Chairman, Johnson & Johnson, and member of the Executive Committee; she brings valuable insights about both enterprise information technology and consumer-facing businesses with an international perspective. Padmasree Warrior, former Chief Technology and Strategy Officer at Cisco, brings extraordinary experience in networking, communications and mobile technology. Dr. Maria Klawe is not seeking re-election and will end her service on the Microsoft Board in December. We thank Dr. Klawe for her many contributions to the Board.
Shareholder outreach and engagement
We deeply value the continued interest of and feedback from our shareholders, and are committed to maintaining our active dialogue with shareholders to ensure a diversity of perspectives are thoughtfully considered. As we move closer to our Annual Meeting, we invite you to write us at AskBoard@microsoft.com about the Board of Directors or corporate governance at Microsoft.
Thank you for the trust you place in us. We appreciate the opportunity to serve Microsoft on your behalf.
||Charles W. Scharf
|Maria M. Klawe
||Charles H. Noski
||John W. Stanton
|Teri L. List-Stoll
||John W. Thompson
|G. Mason Morfit
Notice of 2015 Annual Shareholders Meeting
|Date||December 2, 2015|
|Time||8:00 a.m. Pacific Time|
11100 NE 6th Street
Bellevue, Washington 98004
|Record date||October 2, 2015. Only shareholders of record at the close of business on the record date are entitled to receive notice of, and to vote at, the Annual Meeting.|
|Proxy voting||Important. Please vote your shares promptly to ensure the presence of a quorum at the meeting. Voting your shares now via the Internet, by telephone, or by signing, dating, and returning the enclosed proxy card or voting instruction form will save the expenses and extra work of additional solicitation. If you wish to vote by mail, we have enclosed an addressed envelope, postage prepaid if mailed in the United States. Submitting your proxy now will not prevent you from voting your shares at the meeting, as your proxy is revocable at your option.|
|Items of business||
|Virtual meeting||You also may vote at the meeting via the Internet by visiting microsoft.onlineshareholdermeeting.com and following the instructions.|
|Admission to meeting||Proof of share ownership will be required to enter the Annual Meeting.
See Part 5 – “Information about the meeting” for details.
|Important notice regarding the availability of proxy materials for the Annual Meeting to be held on December 2, 2015. Our Proxy Statement and Annual Report to Shareholders are available at www.microsoft.com/investor.|
By order of the Board of Directors
Bradford L. Smith
October 19, 2015
The use of cameras at the Annual Meeting is prohibited and they will not be allowed into the meeting or any other adjacent areas, except by credentialed media. We realize that many mobile phones have built-in cameras; while these phones may be brought into the venue, the camera function may not be used at any time.