Microsoft CEO Ballmer's pay: Nearly $1.4 million

In annual proxy statement, the company board acknowledges giving the chief executive his target bonus for such successes as Kinect and progress on Windows. But sluggish Windows Phone 7 sales, in part, prevent Ballmer from getting more.

Jay Greene Former Staff Writer
Jay Greene, a CNET senior writer, works from Seattle and focuses on investigations and analysis. He's a former Seattle bureau chief for BusinessWeek and author of the book "Design Is How It Works: How the Smartest Companies Turn Products into Icons" (Penguin/Portfolio).
Jay Greene
2 min read

Microsoft's board decided to pay Chief Executive Steve Ballmer a $682,500 bonus on top of his $682,500 salary in the fiscal year that ended June 30, concluding that Ballmer met, but did not exceed, his performance targets for the year.

Microsoft's Steve Ballmer Microsoft

The pay was disclosed today in Microsoft's annual proxy statement filed with the Securities and Exchange Commission. Ballmer's compensation plan allows for the bonus to be two times his salary, if the board deems his performance worthy.

In the filing, the board gave Ballmer credit for the successful product launches of the Kinect motion-sensing controller for the Xbox as well as the cloud-based Office 365. The board also noted "enhancements" to Windows Azure and Bing, as well as "continued progress positioning the company as a leader in the cloud and cloud-based infrastructure."

Ballmer also benefited from the company's partnerships with Facebook and Nokia. And the board noted the company's "significant progress in development of the next generation of Windows." The company previewed Windows 8 at its Build conference in Anaheim, Calif., last month. And last, the board credited Ballmer for his work in the pending acquisition of videoconferencing pioneer Skype.

The board also highlighted a few misfires that prevented Ballmer from receiving his total potential bonus. It pointed to "lower than expected initial sales of Windows Phone 7." Ballmer said as much during the company's financial analyst meeting in September, noting: "We haven't sold quite as many probably as I would have hoped we would have sold in the first year."

The board also pointed to the 2 percent decline in revenue for the Windows and Windows Live Division as a factor in determining Ballmer's bonus. And it noted "the need for further progress in new form factors," presumably tablet computers, the rapidly growing market that Apple has dominated with its iPad.

In the proxy, the company also disclosed the compensation for four other senior executives. Chief Operating Officer Kevin Turner was the highest paid of the group, taking home $9.3 million last year, made up of $732,500 in salary, $1.9 million in bonus and $6.6 million in stock awards. Steven Sinofsky, president of the Windows and Windows Live division, took home $7.2 million, including $649,167 in salary, $1.3 million in bonus and $5.3 million in stock awards.

Office division President Kurt DelBene earned $6.2 million, including $603,333 in salary, $1.5 million in bonus and $4.2 million in stock awards. And Chief Financial Officer Peter Klein received $3.5 million, made up of $525,000 in salary, $720,000 in bonus and $2.3 million in stock awards.

Microsoft's board also decided to increase its own compensation, something it hadn't done for five years. The board boosted its pay by 25 percent to $250,000 a year--$100,000 in cash and $150,000 in stock awards.