Microsoft stock (NASDAQ:MSFT) dipped as much as 4.7% in after-hours trading yesterday after a Business Insider story disclosed the company’s employee salary packages and incentives obtained from leaked documents. The document contained guidelines set at the beginning of the year for newly recruited staff with a breakdown of base pay, hiring bonuses, and stock awards. The documents shed light on the variations in package structures for employees at different levels within Microsoft.
Importantly, the tech giant pays employees as per their location in the U.S. For instance, people living in New York and San Francisco are paid more owing to the higher standard of living in these states. Also, engineering roles are offered higher pay since they play a pivotal role in the company’s functioning.
From the records, it was observed that Microsoft follows a tiered system for pay based on seniority, field, and location. The lowest package included a base pay of $42,500 with no bonus or stock awards. Meanwhile, the highest package as per the document included a base salary of $361,500, along with $1.2 million in hiring bonuses and approximately $1 million in annual stock awards.
MSFT Begins Notes Exchange on Completing Activision Deal
In another recent development at Microsoft, the company has initiated an exchange offer of notes valued at $3.65 billion for Activision Blizzard’s outstanding debt. Microsoft completed the $69 billion acquisition of the gaming company on October 16 after receiving regulatory approval from the UK Competition and Markets Authority (CMA) for the long-pending deal.
Microsoft will replace all the old securities of Activision with a combination of new notes and cash. Meanwhile, Activision will solicit consent from all existing bondholders to accept certain amendments to the notes.
Bondholders are scheduled to receive the exchange consideration on the tender date, which is set for October 27, and the deadline for submitting tender offers is November 14. Microsoft has said that both of these dates can be extended.
How Good is MSFT Stock?
Following the closing of the Activision acquisition, analysts are highly bullish about MSFT’s trajectory. Yesterday, D.A. Davidson analyst Gil Luria maintained a price target of $415 (24.8% upside) on MSFT and his Buy rating while calling the deal “transformational.”
Also, Piper Sandler analyst Brent Bracelin reiterated a Buy rating and a $400 (20.3% upside) price target on Microsoft stock. Bracelin flags MSFT as the “highest conviction large-cap stock to own,” citing multiple strengths.
Overall, MSFT commands a Strong Buy consensus rating on TipRanks. This is based on 31 Buys versus four Hold ratings. The average Microsoft Corp. price forecast of $398.34 implies 19.8% upside potential from current levels.
