| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Salary Determinations for Certain Executive Officers
On March 21, 2019, the Chief Executive Officer of MicroStrategy Incorporated (the “Company”) approved increases to the annual salaries of Phong Q. Le, the Company’s Senior Executive Vice President, Chief Operating Officer & Chief Financial Officer, Timothy E. Lang, the Company’s Senior Executive Vice President & Chief Technology Officer, and W. Ming Shao, the Company’s Senior Executive Vice President & General Counsel, resulting in annual salaries of $673,000 for Mr. Le, $492,000 for Mr. Lang, and $528,000 for Mr. Shao. These increases are effective April 1, 2019.
2019 Senior Executive Vice President, Worldwide Sales Compensation Plan
On March 18, 2019, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of the Company established a performance-based cash bonus plan for Kevin Norlin, the Company’s Senior Executive Vice President, Worldwide Sales, relating to his performance for 2019. Under this plan, Mr. Norlin is eligible to receive:
| | • | | a cash bonus amount calculated by multiplying 2.0% by the following dollar amount: (1) the amounts payable under contracts executed in 2019 during the twelve months following contract execution attributable to license, first year maintenance, premium support, incremental term license, incremental cloud license, education services, and 50% of expert services, in each case to the extent relating to transactions sold by the Sales department, minus (2) the expenses accrued for 2019 of the Sales department for salary, benefits, variable compensation, travel and entertainment, and purchase orders, plus expenses accrued for 2019 for other costs of sales originating fromnon-Sales departments that are cross charged to the Sales department, minus (3) a budgeted amount of $19.0 million; and |
| | • | | a cash bonus amount calculated by multiplying 2.0% by the following dollar amount: (1) the amount of recognized product support revenue for 2019, plus the amount of recognized subscription services revenue for 2019, minus (2) a budgeted amount of $324.0 million. |
Mr. Norlin’s maximum cash bonus amount pursuant to this plan is $8.0 million. The Compensation Committee has the discretion to award a cash bonus amount that is lower than the eligible bonus amount calculated pursuant to the plan. The Company is also entitled to recover any bonus paid to Mr. Norlin if the Compensation Committee subsequently determines that Mr. Norlin did not satisfy one or more of the eligibility requirements described in the bonus plan, the amount calculated as the bonus amount payable was incorrect, or Mr. Norlin otherwise should not have received the bonus.
The foregoing summary of Mr. Norlin’s performance-based cash bonus plan is qualified by reference to the full text of the plan, a copy of which is filed as Exhibit 99.1 to this Current Report on Form8-K and incorporated herein by reference.
2019 Senior Executive Vice President, Worldwide Services Compensation Plan
On March 18, 2019, the Compensation Committee established a performance-based cash bonus plan for Stephen Holdridge, the Company’s Senior Executive Vice President, Worldwide Services, relating to his performance for 2019. Under this plan, Mr. Holdridge is eligible to receive:
| | • | | a cash bonus amount calculated by multiplying 1.5% by the following dollar amount: (1) the value of hours worked against customer engagements attributable to consulting and education services delivered by the Services department in 2019, minus (2) the expenses accrued for 2019 of the Services department for salary, benefits, variable compensation, travel and entertainment, purchase orders, and subcontractor fees, plus expenses accrued for 2019 for other costs of services originating fromnon-Services departments that are cross charged to the Services department, minus (3) a budgeted amount of negative $29.0 million; and |
| | • | | a cash bonus amount calculated by multiplying 2.0% by the following dollar amount: (1) the amount of recognized product support revenue for 2019, plus the amount of recognized subscription services revenue for 2019, minus (2) a budgeted amount of $324.0 million. |
