ore nce ttl So wna 2 ul 12 1B 4 15 16 ke 18 19, 20 21 2 2B 24. 25 26 \Hgnerable Catherine Shaffer eye pct 02 Www oun ja int sypeRror COU! . eel IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON IN AND FOR THE COUNTY OF KING TODD PIERCE, | No. 17-2-09940-6 SEA Plaintiff, v. REVISED [PR@@258] FINDINGS OF FACT AND CONCLUSIONS OF LAW BILL & MELINDA GATES FOUNDATION, 1. INTRODUCTION This Court presided over a three-week trial beginning August 27, 2018, The parties presented opening statements, offered over 150 exhibits, and questioned nineteen (19) fact witnesses. Following closing arguments from counsel, the Court issued an oral ruling! in Plaintiff's favor on two of three causes of action. The following does not capture every detail of trial, but presents the-salient findings of fact and conclusions of law in support of such ruling: I. FINDINGS OF FACT Pierce’s Background 1. Plaintiff Todd Pierce has dedicated his career to innovating within the healthcare industry. He, like many others at the Gates Foundation, are visionaries in their respective fields. 2. Pierce grew up in rural Texas, He attended Austin College, where he graduated with a degree in Economies and Finance. While going to school, he worked for " The Court hereby incorporates its oral ruling of September 13, 2018 by reference 1 ‘ope, We ws) amor AN COS Pred, oolony. REVISED [PR@POSEBT FINDINGS OF FACT SCHROETER, GOLDMARK & BENDER ONCLUSIONS OF LAW- 1 ee (08) 2-000 Pac 5) ESComputer Language Research, Inc. — eventually serving as its Director of Advanced Network Systems. He moved from Texas to the Bay Area and received his Masters in Health Policy from the University of California at Berkeley in 1997. 3. During his time at Berkley and after (from 1994 and up through 2002), Pierce worked in public service in increasingly prominent leadership positions. He served as a Special Assistant to the Chief of Staff at the United States Department of Veterans Affairs in Palo Alto; he then served as Agency Planning Director for Alameda County Social Services Agency in Oakland; and finally, as Chief Information Officer (CIO) at Santa Clara County's Social Services Agency in San Jose from 1999 to 2002, 4. Pierce spent the next nine years working at Genentech, a large biotechnology company in San Francisco. Pierce was hired into the role of Vice President of Information ‘Technology and was quickly promoted to take over his supervisor’s role of CIO. 5. _ In early 2011, Pierce was recruited to join Genentech’s parent company (La Roche) as a Senior Vice President and Head of Pharma Informatics for a short stint. During that period, Pierce played a key role in integrating the IT functions and strategies of two companies into one. 6. Pierce was then recruited to serve as an Executive Vice President at Salesforce in San Francisco starting in October of 2011; When Pierce resigned from La Roche, he left behind unvested stock. Salesforce offered him a compensation package that, at least in part, made up for this loss, 7. As an Executive Vice President at Salesforce, Pierce received a salary, bonuses or commissions (depending on the time period), and a mix of Restricted Stock Units (RSUs) and Incentive Stock Options (ISOs). 8. __RSUs are, in essence, shares of company stock. ISOs are options that give employees the right to purchase stock and, assuming the share price goes up, sell them at a profit (i¢., the difference between the price on the grant date and the price on the sell date). 9. — During Pierce’s tenure (fiom October 2011 to March 2015), Salesforce granted him a combined total of 262,800 RSUs and ISOs, all of which were subject to vesting over a four-year period, with 25% of each grant vesting in the first year, then quarterly or monthly thereafter. Vesting occurred so long as Pierce remained employed. 10. Concurrent with his employment at Salesforce, Pierce served on various non- profit and for-profit boards, sometimes for pay and sometimes as a volunteer. This work continued during and after his employment at the Gates Foundation. 2014: Morgan Starts to Recruit Pierce 11. In May 2014, Sue Desmond-Hellmann joined the Bill and Melinda Gates Foundation as Chief Executive Officer (CEO). When she started, she made significant changes to the Executive Leadership Team (ELT). 12, The Foundation was and is organized into a handful of Divisions, led by Presidents who direct program areas (¢.g., Malaria, Polio, Financial Services for the Poor). The program staff carry out strategies approved by Bill and Melinda Gates. Strategies have their own budget and mandate to carry out work, separate and apart from other programs and strategies, even in the same Division. There is very little cross-program collaboration. REVISED [PROPOSED] FINDINGS OF FACT SCHROETER, GOLDMARK & BENDER AND CONCLUSIONS OF LAW~2 0 te Sie 5 Ste We EO - Plintifs Revived Proposed Findings and Conclusions of Lawaia ween 10 iu 12 aa 14 15 16 7 18 a 20 21 22 23 24 26 13. The operations functions ~ e.g,, human resources, legal department, facilities, information technology (IT) — are organized separately. Historically, IT was seen as playing a support role to the program staff, largely according to each program’s unique demands, 14, Shortly after Desmond-Hellmann began as CEO, she recruited Leigh Morgan to act as a consultant to the Foundation. Morgan had been a loyal colleague of Desmond- Hellmann’s.at both Genentech and at the University of California at San Francisco, where Desmond-Hellmann served as Chancellor and Morgan served as her Assistant Chancellor. 15. Desmond-Hellmann created the position of Chief Operating Officer (COO) for Morgan to occupy, effective in September of 2014, 16, _ Morgan was-net-equipped-for-the Tott-of-CO0-and had no background in Information Technology (IT), which was a glaring need at the Foundation. 17. In August 2014, Morgan contacted Pierce about consulting on various IT issues at the Foundation. Morgan had worked with Pierce (and Desmond-Hellmann) at Genentech in 2002 and both had been impressed by his leadership, creativity, and vision. 18. _ When Morgan reached out to Pierce, she had not yet started as the COO, but had already determined that, in order to be successful, she would need to recruit talented people to surround her. 19. Morgan’s conversations with Pierce about general IT topics quickly transformed into recruitment of Pierce for a job. On the same day she set up a meeting with Pierce to discuss a possible role at the Foundation (September 29, 2014), she drafted talking points she could use when she (someday) fired the Foundation’s then head of IT, Dale Christian, and replaced him with (she hoped) Todd Pierce. 20. Morgan knew that, if Pierce were to join the Foundation, he would be taking a steep cut in compensation to do so. 21. Although Pierce was highly compensated in his job at Salesforce, he missed having a more direct impact in the healthcare field and his desire to return to it was piqued in his discussions with Morgan. 22. _ Even so, from his first contact with Morgan, Pierce was clear he was not interested in joining her at the Foundation in a traditional IT role. He had already had several high-level director and executive IT jobs in his career overseeing much larger organizations than the 130 or so IT employees at the Foundation, If he were going to leave his (lucrative) position at Salesforce or at another for-profit enterprise, it would be for something with more impact and vision — like the role that a/Chief Digital Officer would perform. 23. Morgan and Pierce discussed that a traditional CIO position, like Christian’s, focuses on supporting individual programs within a single organization, while a CDO drives innovation’ by building connections inside the enterprise and with leaders outside the business, 24, Morgan was enthusiastic about bringing Pierce to the Foundation. She commuiicated with Desmond-Hellmann about it and, together, they decided they needed Melinda French Gates’ “buy in” before going further in negotiations with Pierce because the CDO role was a departure from what the Foundation had been doing in IT. 25. French Gates indicated she was open to the concept.of an expanded digital leadership position at the Foundation and, in turn, Morgan invited Pierce to Seattle for further discussions. REVISED (PR@RESE) FINDINGS OF FACT SCHROETER, GOLDMARK & BENDER AND CONCLUSIONS OF LAW-3 pm 562 8 «Fx a) Plintf's Revised Proposed Findings and Conclusions of Law