Judson Althoff
MICROSOFTAbout Judson Althoff
Judson B. Althoff is Executive Vice President and Chief Commercial Officer at Microsoft, leading global commercial sales, partner, and customer success organizations; he is 52, joined Microsoft in March 2013, and has served as CCO since July 2021 . FY25 company performance context under his remit included double-digit revenue growth highlighted by total revenue of $281.7B (+15% y/y), operating income of $128.5B (+17%), net income of $101.8B (+16%), and diluted EPS of $13.64 (+16%) ; the proxy also highlights strong commercial execution tied to AI adoption and Azure consumption in Althoff’s organization .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Microsoft | Executive Vice President & Chief Commercial Officer | 2021–present | Led Microsoft Customer & Partner Solutions, driving value to customers, accelerating secure AI adoption, and expanding Azure OpenAI and Foundry usage (>70,000 enterprise customers) |
| Microsoft | Executive Vice President, Worldwide Commercial Business | 2017–2021 | Grew Microsoft’s commercial momentum and partner-led transformation across segments |
| Microsoft | President, Microsoft North America | 2013–2017 | Led U.S. field organization in enterprise transition to cloud and modern workplace |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Ecolab Inc. | Director | Not disclosed | Corporate governance and oversight at a large-cap commercial services company |
Fixed Compensation
Multi-year compensation (fiscal years ending June 30):
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Salary ($) | 960,000 | 960,000 | 993,333 |
| Stock Awards ($) | 12,848,921 | 18,515,353 | 23,708,619 |
| Non-Equity Incentive ($) | 2,243,520 | 3,497,040 | 3,398,194 |
| All Other Compensation ($) | 152,277 | 77,934 | 98,588 |
| Total ($) | 16,204,718 | 23,050,327 | 28,198,734 |
Additional fixed-targets:
- Target bonus percentage: 250% of base salary (FY25) .
- FY25 target cash incentive dollar level (reflecting proration): $2,483,334; maximum $4,966,667 .
Performance Compensation
Annual Cash Incentive – FY25 Design and Outcomes
| Component | Weight | Target | Actual/Payout | FY25 Result |
|---|---|---|---|---|
| Financial results (Incentive Plan Revenue & Operating Income) | 50% | Revenue target $290.64B; Operating income target $122.75B | Revenue actual $289.18B (+15.22% y/y); Operating income actual $128.84B (+17.80% y/y); weighted payout 117.00% of target | Contributed to total cash incentive outcome |
| Operational assessment | 50% | SLT operational goals across Security; Product, Customers & Stakeholders; Culture | Althoff operational payout 156.67% of target | Contributed to total cash incentive outcome |
| Total FY25 cash incentive | — | Target $2,483,334 | 128.50% of target | $3,398,194 |
Key operational highlights for FY25 informing payout:
- Led customer and partner engagements focused on security, innovation, and product quality; accelerated responsible AI adoption and Azure OpenAI consumption; expanded AI Foundry to >70,000 enterprise customers and strengthened sales leadership bench .
Equity Incentives – Grants, Metrics, Vesting
| Award | Grant date | Shares | Vesting | Notes |
|---|---|---|---|---|
| Performance Stock Award (PSA) – FY25 | 9/16/2024 | 23,374 target shares | Earned after 3-year performance period (FY25–FY27) with rTSR modifier | Metrics & weights: 35% Azure & other cloud services revenue growth; 35% Microsoft Cloud (ex-Azure) revenue growth; 15% Consumer Services revenue growth; 15% Xbox content & services revenue growth |
| Stock Award (SA) – FY25 | 9/16/2024 | 23,374 shares | 25% on Aug 31, 2025; 12.5% each six months thereafter | Time-based vesting; subject to continued employment |
| PSA – FY23 (completed) | FY23 grant | Company-wide PSA final payout 161.52% (3-yr core metric avg 107.68% × rTSR modifier 150%) | Vested 8/31/2025 | rTSR at 80th percentile vs S&P 500; positive absolute TSR requirement met |
Outstanding Equity (as of June 30, 2025)
| Award date | Unvested SAs (#) | Market value ($) | Unearned PSAs at max (#) | Market/payout value ($) | Comment |
|---|---|---|---|---|---|
| 9/13/2021 | 2,609 | 1,297,743 | — | — | Standard vest schedule |
| 9/19/2022 (SA) | 10,499 | 5,222,308 | — | — | SA tranche |
| 9/19/2022 (PSA FY23) | — | — | 45,220 (actual earned) | 22,492,880 | FY23 PSA vested 8/31/2025 |
| 9/18/2023 | 15,866 | 7,891,907 | 50,772 | 25,254,501 | PSA FY24–FY26 period open |
| 9/16/2024 | 23,374 | 11,626,461 | 23,373 | 11,625,964 | PSA FY25–FY27 period open |
Note: Market values reflect MSFT closing price $497.41 on June 30, 2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of Sept 30, 2025) | Common stock: 82,187; Additional underlying shares or stock units: 63,374; Total: 145,561; ownership <1% of shares outstanding |
| Stock ownership guideline | 8× base salary for Althoff; executives must retain 50% of net shares until compliant; all Named Executives complied in FY25 |
| Hedging/pledging policy | Strict prohibition on hedging, buying on margin, borrowing against, or pledging Microsoft stock for executive officers and directors |
Employment Terms
| Provision | Key terms |
|---|---|
| Employment agreements | None for Named Executives |
| Change-in-control | No change-in-control payments or benefits |
| Clawback | Strong “no-fault” executive compensation recovery policy (restatement or misconduct), applies to cash and equity; awards subject to recoupment under policy and law |
| Severance Plan (Senior Executive) | If terminated without cause: lump sum equal to 12 months’ base salary + target annual cash incentive; pro-rata target annual cash incentive for partial year; continued vesting of SAs scheduled within 12 months; pro-rata PSA vesting after year 1; COBRA contributions and outplacement; requires release and 12-month non-compete/non-solicit |
| Estimated payouts (as of June 30, 2025) | Without cause: $44,328,656; Death/Disability: $64,217,123; Retirement: not shown for Althoff (only applicable if retirement-eligible) |
Performance & Track Record
- FY25 commercial execution: drove customer and partner outcomes in security, innovation, and quality; accelerated responsible AI transformation; leveraged AI infra to increase consumption; Azure OpenAI momentum; AI Foundry adoption exceeded 70,000 enterprise customers; strengthened sales leadership bench .
- FY25 company performance context: revenue $281.7B (+15%), operating income $128.5B (+17%), net income $101.8B (+16%), EPS $13.64 (+16%) .
Compensation Structure Analysis
- Pay mix: Majority performance-based; for non-CEO NEOs, 50% of equity in PSAs and 50% time-based SAs with multi-year schedules, aligning to long-term value creation and retention .
- PSA metrics refined to emphasize cloud and consumer services strategic priorities; rTSR modifier requires outperformance vs S&P 500 for upside and positive absolute TSR .
- FY25 adjustments: Althoff base salary increased to $1,000,000; target equity increased to $19.5M with 23,374 PSAs and 23,374 SAs .
- Risk mitigants: cash incentive capped at 200% target; diversified metrics; overlapping PSA periods; strict hedging/pledging prohibitions; robust stock ownership requirements and clawback .
Equity Ownership & Alignment Details
| Category | Detail |
|---|---|
| Vested vs. unvested (snapshot) | Significant unvested SAs and PSAs outstanding (see Outstanding Equity table), implying ongoing alignment and potential vest-driven supply events |
| Options | None granted; awards delivered in stock/PSAs; no options to avoid asymmetrical risk incentives |
| Pledging/Hedging | Prohibited for executives and directors (alignment safeguard) |
Employment Terms – Additional Governance
- No extraordinary perquisites; executives receive standard employee benefits; charitable matching available; no tax gross-ups .
- Insider trading policy: preclearance, restricted trading windows, prohibition on trading with MNPI .
Investment Implications
- Alignment: High equity-based compensation and 8× salary ownership guideline, plus prohibition on hedging/pledging, indicate strong long-term alignment; PSA design tied to cloud and AI growth levers suggests payout sensitivity to Azure and Microsoft Cloud KPIs .
- Retention/pressure: Biannual SA vesting after Aug 31, 2025 and large unvested tranches may create periodic selling windows; however, ownership retention requirements reduce near-term selling pressure .
- Trading signals: Watch quarterly disclosures on PSA metric trajectories (Azure/Cloud, Consumer, Xbox) and rTSR vs S&P 500; stronger outperformance can lift PSA payouts (as seen with 161.52% for FY23 PSAs) and may correlate with executive award realizations .
- Downside mitigants: No CIC benefits and robust clawback reduce governance risk; diversified incentive metrics and capped cash incentives limit excessive risk-taking .