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[News] [Rival] Microsoft Pays Millions of Dollars to Its CFO to Keep Him Quiet About What He Saw in MSFT

  • Subject: [News] [Rival] Microsoft Pays Millions of Dollars to Its CFO to Keep Him Quiet About What He Saw in MSFT
  • From: Roy Schestowitz <newsgroups@xxxxxxxxxxxxxxx>
  • Date: Wed, 17 Feb 2010 03:03:26 +0000
  • Followup-to: comp.os.linux.advocacy
  • Newsgroups: comp.os.linux.advocacy
  • User-agent: KNode/4.3.1
Hash: SHA1

Sweet Surrender

,----[ Quote ]
| Chris Liddell made out well at both ends of 
| his recent job transition from CFO of 
| Microsoft to the same post at General 
| Motors. Besides getting a boost to his base 
| salary â $750,000 at GM, up from $561,667 in 
| 2009 at Microsoft â Liddell also received 
| from Microsoft a parting gift of $1.9 
| million. The sum, to be paid in two equal 
| installments on December 31, 2009, and March 
| 31, 2010, comes in exchange for promising 
| not to sue or otherwise disparage Microsoft 
| after his departure, the tech giant recently 
| disclosed in its most recent quarterly 
| filing with the Securities and Exchange 
| Commission.
| Such payouts are often written into 
| employment contracts at the outset of a 
| CFO's tenure as protection from the career 
| risks of making big gambles on corporate 
| strategy. But some experts say Liddell's was 
| out of the ordinary since he did not have an 
| employment contract or other explicit 
| promise of such a sum. In fact, Microsoft's 
| most recent proxy, filed at the end of 
| September, claims its top executives "are 
| not entitled to any payments upon 
| termination of their employment or following 
| a change of control of Microsoft" except 
| under certain conditions that did not apply 
| to Liddell. (Speaking through a GM 
| spokesperson, Liddell said he would have no 
| comment.)
| [...]
| While that raises questions about why 
| Liddell might have left Microsoft after four 
| and a half years there, at least part of the 
| "quo" is spelled out in the extremely 
| detailed resignation letter Liddell signed, 
| also filed with the SEC.
| The letter contained all the standard 
| promises, such as that Liddell would not sue 
| or disparage the company or disclose any of 
| its secrets, but with some language that is 
| highly specific for such contracts.


Sounds familiar? Microsoft did this when an employee blew the
whistle on corruption (see below).



,----[ Quote ]
| THE ALLEGATIONS WERE shocking: For years, Microsoft has systematically
| distorted its profit figures in an effort to consistently beat Wall Street
| expectations and keep its stock price steadily rising. The false reports
| would violate SEC regulations, and amount to outright fraud.
| More shocking was the source of the allegations: Microsoft's chief of
| internal audits, Charlie Pancerzewski, who reported directly to the company's
| chief financial officer.
| Most shocking of all was what happened to Pancerzewski when he reported the
| suspicious bookkeeping to his supervisors, Microsoft CFO Mike Brown and chief
| operating officer Bob Herbold, in the spring of 1995. Soon afterward,
| Pancerzewskiâwho for nearly five years had received stellar performance
| evaluationsâreceived his first-ever unsatisfactory one, and was eventually
| forced to resign.
| Two months ago, Microsoft quietly settled a lawsuit containing these
| allegations, filed in 1997 by Pancerzewski under the Whistleblowers
| Protection Act. The auditor claimed he was wrongfully terminated after
| telling his supervisors that Microsoft might be breaking securities and tax
| laws. The lawsuit made its tortuous way through several rounds of pretrial
| motions until last fall, when US District Judge Carolyn Dimmick denied
| Microsoft's final plea for summary judgment, finding credible evidence that
| Microsoft may have violated SEC rules, as Pancerzewski alleged. Shortly
| thereafter, Microsoft and Pancerzewski settled out of court. Terms of the
| agreement were sealed, but one source who claims familiarity with the case
| says that Microsoft paid Pancerzewski $4 million.

Version: GnuPG v1.4.9 (GNU/Linux)


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