MICROSOFT CORPORATION COMPENSATION COMMITTEE CHARTER
2003 Compensation Charter: MSFT
Review the competitiveness of the Company's executive compensation programs to ensure (a) the attraction and retention of corporate officers, (b) the motivation of corporate officers to achieve the Company's business objectives, and (c) to align the interest of key leadership with the long-term interests of the Company's shareholders.
Review trends in management compensation, oversee the development of new compensation plans and, when necessary, approve the revision of existing plans.
Review the performance of executive management other than the CEO, who will be reviewed by the Governance and Nominating Committee.
Review and approve Chairman and CEO goals and objectives, evaluate Chairman and CEO performance in light of these corporate objectives, and set Chairman and CEO compensation levels consistent with company philosophy. The Nominating and Governance Committee's CEO evaluation will be considered in setting CEO salary and other compensation.
Approve the salaries, bonus and other compensation for all corporate officers at the level of corporate vice president and above, provided that, as to the Chairman and the Chief Executive Officer, the Committee will recommend appropriate salary, bonus and other compensation to the Board for approval.
Review and approve compensation packages for new corporate officers and termination packages for corporate officers as requested by management.
Review and approve the awards made under any executive officer bonus plan, and provide an appropriate report to the Board.
Review and discuss with the Board and senior officers plans for officer development and corporate succession plans for the CEO and other senior officers.
Review and make recommendations concerning long-term incentive compensation plans, including the use of stock options and other equity-based plans. Except as otherwise delegated by the Board, the Committee will act on behalf of the Board as the "Committee" established to administer equity-based and employee benefit plans, and as such will discharge any responsibilities imposed on the Committee under those plans, including making and authorizing grants, in accordance with the terms of those plans.
Review periodic reports from management on matters relating to the Company's personnel appointments and practices.
Produce an annual Report of the Compensation Committee on Executive Compensation for the Company's annual proxy statement in compliance with applicable Securities and Exchange Commission rules and regulations and relevant listing authority.
Annually evaluate the Committee's performance and this Charter.