Microsoft is notorious for sticking it to enemies and business partners alike, especially among the tech elite of Silicon Valley. How satisfying for them, then, to hear how a hometown boy took the company to the cleaners.
When Redmond, Washington-based Microsoft wanted to poach Stephen Elop from Juniper Networks of Sunnyvale, where he was COO, Elop really made them pay. According to a Microsoft proxy filing noticed by the Wall Street Journal, the software company's first concession was to guarantee Elop he would get the original purchase price of his home, even though its value had fallen significantly amid the real estate implosion. Score one for Elop.
Then Microsoft agreed to backstop a higher price for Elop's house, since he'd made some improvements. Score two for Elop. Next, Microsoft actually bought the home, since no one would buy at such levels, and resold it at a loss. Finally, the company paid all taxes associated with Elop's income on the sale, including capital gains, to the tune of $1.2 million. This was Elop's coup de grace.
To summarize: Microsoft reversed Elop's pre-existing real estate loss, financed old home improvements, and then paid the taxes on the income the company itself had created in the first place. And it did all this, to the tune of $4.1 million in total costs, under the guise of "relocation" expenses. No one in going to cry for Microsoft, here, but perhaps a few will wince for the company's shareholders.