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At Microsoft, we celebrate outstanding performance and offer attractive rewards and benefits to bring in and retain amazing talent from all around the world. Annual Stock Awards and the Employee Stock Purchase Plan (ESPP) are an important part of this deal.
An Annual Stock Award is a grant to an employee of a fixed number of restricted shares of Microsoft stock to reward impact. The number of shares is calculated by taking the value of the award and dividing it by the closing Microsoft stock price on the last business day of August. The grant date is August 31 of each year. The shares are awarded each year and are generally communicated during rewards discussions. These shares then become available to the employee over a period of time referred to as the vesting schedule. A portion of the shares will become available to the employee at each vest date throughout the vesting schedule, subject to the employee being employed on the vest date.
Awards must be accepted within the time period specified in the award agreement.
The award agreement is available for employees to review and accept on Microsoft’s internal tool, the Total Rewards Portal.
All employees who are eligible to receive rewards through our annual process are also eligible for Annual Stock Awards. Interns and visiting researchers are not eligible for Annual Stock Awards.
Note: The above information is related to Annual Stock Awards, but other types of stock awards, such as on-hire grants, may have different terms and vesting schedule. Please refer to the grant agreement for the details of each award.
The grants are made by Microsoft Corporation in its sole discretion, not by local subsidiaries and are subject to the terms of the company equity plan. The stock grant does not constitute a term or condition of an employee's employment contract with Microsoft under applicable local laws and Annual Stock Awards do not form part of an employee's salary or benefits of any kind, unless explicitly provided otherwise. Compensation policies may vary in some countries as required by local law.
The ESPP gives eligible employees the opportunity to purchase shares of Microsoft stock at a 10 percent discount through convenient payroll deductions, subject to applicable limits. Eligible employees can elect to have between 1 to 15 percent of their eligible compensation withheld from each paycheck over a three-month offering period. At the end of each three-month offering period, shares of Microsoft stock are purchased at a 10 percent discount and deposited into an individual account with Fidelity. The purchase price per share is 90 percent of the closing fair market value of Microsoft stock on the last US business day of the offering period. The purchased shares are automatically deposited into an individual account at Fidelity, the designated broker for Microsoft’s ESPP. Participation in the ESPP is subject to the terms and conditions of the plan and its governing documents.
Who is eligible?
Employees are eligible to participate in the ESPP if:
they are an employee of Microsoft or a subsidiary or affiliated entity that participates in the ESPP.
they have a hire date before the current offering period's start date.
they are scheduled or expected to be employed by Microsoft or a participating subsidiary for more than five months in any calendar year.
NetBenefits is the Fidelity online tool that enables employees to access their ESPP information around the clock. Upon hire, Fidelity will email eligible employees the instructions to activate their stock plan account. Employees use this account to set their contribution rate, make changes to enrollment, sell shares and access forms, and review their purchase history, account balances, historical transactions, and more.