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04.21.13

Microsoft May be Hiding Something Big as It Pays All Its CFOs Millions of Dollars to Keep Quiet After Financial Fraud Whistleblowing

Posted in Finance, Microsoft at 8:34 am by Dr. Roy Schestowitz

“Microsoft, the world’s most valuable company, declared a profit of $4.5 billion in 1998; when the cost of options awarded that year, plus the change in the value of outstanding options, is deducted, the firm made a loss of $18 billion, according to Smithers.”

The Economist, 1999

Summary: Yet another CFO receives a lot of money to keep his mouth shut about Microsoft’s accounting practices

A SUBJECT we covered a couple of times this morning (Microsoft's CFO leaving after cooking the books) merits an update as a separate post. A reader showed us a report titled “Microsoft to pay departing CFO Klein $2M for non-compete, secrecy promises”, which echoes what Microsoft did when its previous CEO (Mr. Liddell) left. Remember that Charles Pancerzewski, who had worked for Microsoft in accounting, was paid $4 million to keep quiet [1, 2]. He got this money after had revealed systematic financial corruption at Microsoft. The issue got buried thereafter. Here is what the latest report says:

Microsoft’s chief financial officer, Peter Klein, will receive $2 million in the year after he retires from the company, according to documents filed Thursday with the U.S. Securities and Exchange Commission (SEC).
Klein and Microsoft announced Thursday that he will leave the company after an 11-year stint. He will work through the end of the fiscal year, which for Microsoft wraps up June 30.
As part of his separation package, Klein will receive a $1 million payment on Jan. 15, 2014, and a second $1 million check on June 30, 2014, a Form 8-K filed by Microsoft said.
The payments are “compensation for his services during fiscal year 2013 and performance of his obligations under the Agreement,” the 8-K stated.
That agreement, also posted on the SEC website, bars Klein from working for any firm that competes with Microsoft for a period of one year and mandates that he keep confidential all information about Microsoft.

Microsoft needs to be raided again and properly investigated with no option of settlement (bribery) to stop the process. It sure seems like there is systematic bribery whose purpose is to cover up misconduct. Unless or until all those briberies stop we can — within reason — assume Microsoft to be guilty but too big to jail. “Big to jail” means that you are capable of paying people to subvert the course of justice, be it by ousting someone(s) or bribing someone(s).

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A Single Comment

  1. Needs Sunlight said,

    April 21, 2013 at 8:57 am

    Gravatar

    One word : Enron

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