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Gates, Ballmer get slight pay raises

An SEC filing shows that Microsoft's top executives all saw their salary and bonus inch up last year and lays out one shareholder's bid to buck the software giant.

Microsoft's top executives all saw slight increases in salary and bonus last year, according to the company's annual proxy statement, filed Thursday with the U.S. Securities and Exchange Commission.

CEO Steve Ballmer and Chairman Bill Gates each received $551,667 in pay and $313,447 in bonus last year, up from $547,500 in salary and $205,810 in bonus a year ago. Jim Allchin, who heads Microsoft's Windows operating system business, received $505,624 in salary and $400,000 in bonus, up from $495,195 and $400,000, respectively, in 2002. Jeff Raikes, who heads the Microsoft Office unit, earned $524,309 in salary and $300,000 in bonus, up from $495,083 and $250,000 a year ago.

Microsoft's Steve Ballmer While Gates and Ballmer received no stock options, other Microsoft executives did: Allchin and Raikes each received 1.3 million options at $23.99 and Chief Technical Officer Craig Mundie was granted 700,000 options at the same price.

The proxy statement indicated that Microsoft is asking shareholders to approve changes to its stock compensation plan. In July, Microsoft announced plans to shift from granting options to employees to awarding actual shares of restricted stock.

Microsoft is also seeking approval for its plan to add two members to its board of directors, a move announced earlier on Thursday. The company wants to add BMW Chairman Helmut Panke, in addition to former AT&T Vice Chairman Charles H. Noski.

In addition, those who own Microsoft shares will also be asked to vote on a proposal by one shareholder that the company "refrain from making direct charitable contributions." The shareholder, Sheila Kippley of Cincinnati, proposes that instead, the company could choose to pay a dividend and "send a note to shareholders suggesting they contribute it to their favorite charity."

In arguing for her proposal, Kippley quoted Thomas Jefferson, who wrote that "To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical."

Microsoft urged shareholders to vote down Kippley's proposal.