Microsoft Board Authorizes “Say-on-Pay” Advisory Vote on Executive Compensation

REDMOND, Wash. — Sept. 18, 2009 — Microsoft Corp. today announced that its board of directors has approved a shareholder advisory vote on executive compensation at this year’s shareholder meeting on Nov. 19, as part of a “say-on-pay” plan to allow shareholders to provide input on the company’s compensation of senior executive officers.

Under the plan, Microsoft shareholders will be able to cast a nonbinding advisory vote on the company’s executive compensation plan every three years.

“Given the interest in executive pay, we think it makes sense to encourage more dialogue with our shareholders on our compensation approach,” said Brad Smith, Microsoft general counsel and board secretary. “Our executive compensation program is designed to maximize shareholder value by attracting and retaining world-class leaders and aligning their financial rewards with the growth and success of the company.”

Microsoft worked with a number of shareholders to develop its say-on-pay shareholder vote approach. In particular, the company met with representatives of Walden Asset Management, Calvert Investments and the United Brotherhood of Carpenters, which had submitted shareholder proposals asking the board to implement say-on-pay votes.

“By stepping forward to implement an advisory vote this year, Microsoft builds on its leadership in corporate governance,” said Aditi Mohapatra, sustainability analyst, Calvert Group. “We believe that establishing an advisory vote on compensation is a significant step in providing shareholders a voice on this important issue.”

The company also sought input from a number of its largest institutional shareholders, governance advocates and peer companies.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

For more information, financial analysts and investors only:

Bill Koefoed, general manager, Investor Relations, Microsoft, (425) 706-3703

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