Microsoft plans sweeping pay rises: CEO memo

SEATTLE (Reuters) - Microsoft Corp plans to introduce broad raises in salaries and stock awards to attract and retain top talent, CEO Steve Ballmer said in an internal memo obtained by Reuters on Thursday.

Microsoft, which like other Silicon Valley companies Google and Yahoo may be losing top employees to hot upstarts like Facebook, must improve the way it rewards and support its most talented staff, Ballmer said.

"Through our history, we have been THE place people came when they wanted to make a difference in the world through software, hardware and services," the chief executive said in a memo sent to all employees on Thursday morning.

"This is as true today as it has been at any time in our history, and the changes we're rolling out today will help ensure Microsoft continues to be the place that top talent comes to change the world."

The action follows Google's 10 percent raises this year. Microsoft plans, among other things, to make "important" compensation increases for divisions with fast-moving markets, including research and development and certain geographies.

All employees will have a portion of their stock awards shifted into base salary, according to the memo. Microsoft's shares have stayed roughly flat from mid-2009 levels.

The company will tie bonuses and stock awards closer to performance, with the review process also undergoing changes, Ballmer said.

The changes will occur around September, according to the memo. Microsoft's shares were down 0.8 percent at $25.542.

(Reporting by Bill Rigby)