Microsoft Is Paying Steven Sinofsky $10 Million Not To Work For Apple, Amazon, Facebook, Or Google
Sinofsky is in line for a payoff that will earn him more than $10m (£6.6m) according to calculations by the Guardian, covering 418,000 share options that were due to vest through to mid-2016. The agreement also bans him from trying to persuade a list of companies including IBM, Dell, Intel and Nokia from ceasing to be Microsoft customers.
Microsoft also revealed that it generated just $853m from sales of its Surface tablet in the year to the end of June, following its ambitious launch last June. That compares against a $900m writedown on unsold Surfaces at the end of the last quarter, and the $1bn of sales and marketing expenses that the company recorded for its fiscal year to the end of June.
By contrast, Apple has raked in $24bn from iPad sales in the same period as the Surface has been available.
The revenue figure for the Surface suggests that the company sold about 1.7m of the devices between their launch in October and June 2013. That suggests a slow takeoff as the company tries to reorient itself towards becoming a "devices and services" business, as chief executive Steve Ballmer is aiming to do.
The restrictions on Sinofsky's future employment are revealed along with Microsoft's official 10-K filing with the Securities and Exchange Commission.
Sinofsky was ousted apparently following disagreements with Ballmer over the future direction of Windows and the company's focus on software and services. Sinofsky had been seen as an heir apparent to Ballmer's 13-year tenure as chief executive, having previously been a close confidante of Bill Gates – and one of the people who warned him in the 1990s about the potential impact of the internet on Microsoft's software-based business.
As one of the most senior people to have left Microsoft in the past year, Sinofsky's future had been the source of speculation. The SEC filing shows that he is banned from trying to poach Microsoft staff or persuade customers to go with him. He is also banned from encouraging a list of companies – Asus, Acer, Dell, HP, HTC, IBM, Intel, Chinese PC and smartphone maker Lenovo, LG, Nokia, chipmaker Qualcomm, Samsung, Sony and Toshiba – from ending their relationship with Microsoft.
Since leaving the company officially at the end of December 2012, Sinofsky has been seen in public a number of times, begun teaching classes at Harvard University and has started writing a blog, Learning by Shipping, which offers management observations. The agreement with Microsoft includes a mutual "non-disparagement" clause, meaning that Sinosky – a 24-year veteran of Microsoft – is unlikely to make any criticism of his former employer's moves.
Microsoft's woes with the Surface, which has managed only single-digit shares of the tablet market despite a huge advertising budget, have only added to the problems its Windows division is facing as the PC market slows down. Microsoft says the market generally shrank by 9% year on year as customers shift to tablets and smartphones, and take longer before replacing older PCs.
This article originally appeared on guardian.co.uk
