Brad Smith
MICROSOFTAbout Brad Smith
Bradford L. Smith is Vice Chair and President of Microsoft, appointed in September 2021; he joined Microsoft in 1993 and previously served as President and Chief Legal Officer and General Counsel, among other senior legal roles. He is 66 years old as of July 30, 2025, and serves on the Board of Directors of Netflix, Inc. . Under the current leadership team, Microsoft delivered FY2025 revenue of $281.7B (+15% YoY), operating income of $128.5B (+17%), net income of $101.8B (+16%), and diluted EPS of $13.64 (+16%) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Microsoft | Vice Chair and President | 2021–present | Executive leadership across trust, AI policy, cybersecurity programs, and sustainability initiatives . |
| Microsoft | President & Chief Legal Officer | 2015–2021 | Led legal, compliance, public policy; elevated Microsoft’s external trust agenda . |
| Microsoft | EVP, General Counsel & Secretary | 2011–2015 | Oversaw global legal strategy and corporate governance . |
| Microsoft | SVP, General Counsel & Secretary | 2001–2011 | Led legal operations across major product and geographic areas . |
| Microsoft | Chief Compliance Officer | 2002 | Established enterprise compliance leadership . |
| Microsoft | Deputy General Counsel, Worldwide Sales | Pre-2001 | Supported global sales legal frameworks . |
| Microsoft | Managed European Law & Corporate Affairs (Paris) | Pre-2001 | Led European legal and corporate affairs . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Netflix, Inc. | Director | Current | Governance and strategy oversight for global streaming platform . |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 | 1,000,000 |
| Target Cash Incentive ($) | 2,500,000 | 2,500,000 | 5,000,000 |
| Non-Equity Incentive Paid ($) | 2,378,500 | 3,642,750 | 3,421,000 |
| All Other Compensation ($) | 212,777 | 112,868 | 111,750 |
| Total Compensation ($) | 18,115,690 | 23,439,793 | 28,267,295 |
Performance Compensation
| FY2025 Incentive Category | Weight | Target/Payout Mechanics | Actual Payout |
|---|---|---|---|
| Financial (Incentive Plan Revenue & Operating Income) | 50% | Formulaic vs targets | 117.00% of target |
| Operational (Security; Product, Customers & Stakeholders; Culture) | 50% | Committee assessment across three categories | 156.67% of target |
| Total FY2025 Cash Incentive | — | — | 136.84% of target ($3,421,000) |
| FY2025 Equity Grants | Type | Target Shares | Vesting |
|---|---|---|---|
| Annual Equity under Executive Incentive Plan | PSAs | 23,374 | Earned based on 3-year performance and relative TSR modifier; vest in full at end of period . |
| Annual Equity under Executive Incentive Plan | SAs | 23,374 | 25% vests on Aug 31, 2025; 12.5% semiannually thereafter, subject to continued employment . |
| FY2023 PSA Results (3-year period ended Jun 30, 2025) | Metric (Weight) | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| Azure & Other Cloud Services Revenue Growth (35%) | % growth | 29.23% | 36.76% | 44.28% | 34.58% | 85.52% |
| Microsoft Cloud Revenue Growth excl. Azure & Other Cloud (35%) | % growth | 8.09% | 14.38% | 20.67% | 14.77% | 106.20% |
| Consumer Services Revenue Growth (15%) | % growth | -0.01% | 11.09% | 22.20% | 15.59% | 140.50% |
| Xbox Content & Services Revenue Growth (15%) | % growth | -2.90% | 14.23% | 31.37% | 14.81% | 103.38% |
| Core Metric Average Payout | — | — | — | — | — | 107.68% |
| 3-year Relative TSR Modifier vs S&P 500 | Percentile | — | — | — | 80th | 150.00% |
| Final FY2023 PSA Payout | — | — | — | — | — | 161.52% |
| FY2025 PSA Metrics & Weights | Description | Weight |
|---|---|---|
| Azure & Other Cloud Services Revenue Growth | Azure and AI consumption-based services, GitHub cloud, Nuance Healthcare cloud, VDI, other cloud | 35% |
| Microsoft Cloud Revenue Growth excl. Azure & Other Cloud | M365 Commercial Cloud, commercial LinkedIn, Dynamics 365 | 35% |
| Consumer Services Revenue Growth | All consumer areas excluding Xbox, device licensing, devices | 15% |
| Xbox Content & Services Revenue Growth | Content and services incl. Game Pass, cloud gaming, advertising | 15% |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Common Shares (as of Sep 30, 2025) | 402,131 (<1% of MSFT common) |
| Additional Underlying Shares/Units (unvested SAs not vesting within 60 days) | 26,151 |
| Unvested SAs (award dates; shares; market value at 6/30/2025 close $497.41) | 9/13/2021: 3,210 ($1,596,686); 9/19/2022: 11,116 ($5,529,210); 9/18/2023: 14,779 ($7,351,222); 9/16/2024: 23,374 ($11,626,461) |
| Unearned PSAs (as of 6/30/2025, reported at maximum trending per SEC rules) | 2024 PSA: 47,292 ($23,523,514); 2025 PSA: 23,373 ($11,625,964) |
| Stock Ownership Guideline (multiple of salary) | 8x base salary; compliant in FY2025 |
| Hedging & Pledging | Prohibited for executive officers (no derivatives, margin purchases, or pledging) |
| Options Held | None; Microsoft has not granted options to NEOs since 2003 . |
Employment Terms
| Provision | Detail |
|---|---|
| Employment Agreement | None; no executive employment contracts . |
| Change-in-Control | No CIC payments or benefits . |
| Severance Plan (without cause) | Lump sum = 12 months base salary + target annual cash incentive; pro-rata target cash incentive for partial year; SAs that would vest in 12 months continue to vest; PSAs pro-rata vest after year 1; COBRA contributions and outplacement; requires release, confidentiality/non-disparagement, 12-month non-compete/non-solicit . |
| Termination Value (as of Jun 30, 2025) | Without Cause: $51,351,340; Retirement: $37,062,019; Death/Disability: $64,235,527 (valued at $497.41/share) . |
| Retirement Eligibility | As of Jun 30, 2025, Smith is retirement eligible; retirement-based continuation of vesting applies per policy . |
| Clawback | Robust “no-fault” executive compensation recovery policy (restatements and misconduct), applies to cash and equity, time- and performance-based awards . |
| Insider Trading Controls | Restricted trading windows and preclearance for certain officers/directors . |
Investment Implications
- High alignment: Large ongoing equity exposure via PSAs and SAs, strict no-hedge/pledge rules, and 8x salary ownership guideline (in compliance) indicate strong “skin-in-the-game” and long-term alignment with shareholder value creation .
- Multi-year performance linkage: PSA metrics tied to core cloud and consumer growth drivers with a relative TSR modifier; recent 3-year PSA paid 161.52% driven by strong operational results and 80th percentile relative TSR—reinforces pay-for-performance linkage .
- Retention risk appears contained: Four-year SA vesting cadence and pro-rata PSA vesting features in severance/retirement, paired with a 12-month non-compete, reduce abrupt exit risk but maintain accountability via robust clawback .
- Trading signals: Periodic SA vesting (25% initial, then semiannual 12.5%) can create predictable supply; however, restricted trading windows and preclearance reduce opportunistic sales risk. No options outstanding eliminates repricing risk .
- Governance/perquisites: Personal security is provided for Smith given role-related risk and is disclosed in “All Other Compensation”; no golden parachute tax gross-ups or extraordinary perquisites—shareholder-friendly program design .