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Microsoft Board Gives ''Underpaid'' Ballmer a 2% Raise

By - Source: SEC.gov | B 40 comments

Microsoft gave CEO Ballmer a bonus that doubled his compensation package for fiscal 2011, but it was still only half of what he could have been awarded.

Microsoft CEO Steve Ballmer received a bonus of $682,500 for the company's most recent fiscal year, half of the maximum possible bonus he could have received. The news was revealed in a Microsoft filing with the U.S. Securities and Exchange Commission. Ballmer is elligible to receive a maximum bonus of double his current base salary. His bonus, combined with his $685,000 base salary, brings the CEO's total compensation to $1.38 million, significantly less than that of his peers. Microsoft said in the filing that its board believes Ballmer is "underpaid for his role and performance" when compared to his peers. Ballmer refuses to accept any stock compensation, which would boost his compensation by a considerable amount.

"For fiscal year 2011, the Compensation Committee recommended and the independent members of our Board of Directors approved an Incentive Plan award of $682,500, which was 100% of [Ballmer's] target award," Microsoft said.

The company goes on to explain that the bonus was based on his performance appraisal as well as the operating income of the company relative to 25 large technology companies; successful product launches (including Kinect for Xbox, Office 365, enhancements to Windows Azure and Bing), key partnerships with Facebook and Nokia, significant progress in development of Windows 8, and work towards the acquisition of Skype, among other things. However, Microsoft also took into account some of Ballmer's failures, including lower than expected initial sales of Windows Phone 7 and the 2% decline in revenue for the Windows and Windows Live Division.

Redmond puts the average salary of Ballmer's peers at $15.8 million while Ballmer's compensation, had he received the maximum possible bonuses, would only amount to just under $2.05 million. In fiscal 2011, Ballmer's salary increased 2.2% to $685,000. According to Reuters, Ballmer's 3.95 percent of Microsoft shares gives him a personal fortune of $14.5 billion. 

As far as other Microsoft executives are concerned, Steven Sinofsky, President of the Windows Division, got a 0.8% raise, bringing him up to $650,000, while Corporate VP and CFO Peter Klein saw his pay increased 6% (to $530,000) and COO Kevin Turner was awarded a 16.3% increase (to $750,000), both adjustments made to more closely reflect pay of comparable positions in their peer groups. Last but not least, the salary of Kurt DelBene, President of the MS Office division, was established at $630,000 in his first year as an executive officer.

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Top Comments
  • 21 Hide
    randomizer , October 5, 2011 12:31 PM
    That picture actually fits the article perfectly for once.
  • 14 Hide
    pjmelect , October 5, 2011 12:51 PM
    If I had over 14 billion, I wouldn't be bothered over a few million.
  • 11 Hide
    mrecio , October 5, 2011 3:35 PM
    Redmond puts the average salary of Ballmer's peers at $15.8 million while Ballmer's compensation, had he received the maximum possible bonuses, would only amount to just under $2.05 million.

    So Steve ballmer is making 13.6 million LESS than his peers at other companies? I have to say his pay seems much more inline with reality when all of these other CEO's are getting way overpaid to stretch pennies by laying off workers. Microsoft is scoring points with me on this one.
Other Comments
  • 8 Hide
    baddad , October 5, 2011 12:10 PM
    Good for Microsoft, it's good to see they take care of their people.
  • 21 Hide
    randomizer , October 5, 2011 12:31 PM
    That picture actually fits the article perfectly for once.
  • -5 Hide
    that_aznpride101 , October 5, 2011 12:33 PM
    a lot of ppl could certainly use some of that $, esp in this tough economy.
  • 7 Hide
    gtvr , October 5, 2011 12:34 PM
    Very interesting, after reading the Washington Post article about the Amgen CEO who is making $21M.
  • 3 Hide
    back_by_demand , October 5, 2011 12:35 PM
    that_aznpride101a lot of ppl could certainly use some of that $, esp in this tough economy.

    Why don't they go beg to Apple for some cash then, $76 billion in the bank and a laughable charity policy.
  • 14 Hide
    pjmelect , October 5, 2011 12:51 PM
    If I had over 14 billion, I wouldn't be bothered over a few million.
  • -6 Hide
    lamorpa , October 5, 2011 1:25 PM
    greghomeat least this isn't a Stevie 1 buck salary for tax evasion.....

    How's that? Taxes are on a percentage of pay. So are you saying that being paid well is ripping you off and being paid very little is also ripping you off? Sounds like simple envy to me.
  • 9 Hide
    zak_mckraken , October 5, 2011 1:37 PM
    lamorpaHow's that? Taxes are on a percentage of pay. So are you saying that being paid well is ripping you off and being paid very little is also ripping you off? Sounds like simple envy to me.

    No, he's saying that Job's 1$ salary is ripping the government off and, by extension, american citizens.
  • 6 Hide
    crewton , October 5, 2011 1:46 PM
    $1mil salary = 35% tax
    $1mil stock = 15% tax

    easy way to take home 200k more on the same money.
  • 4 Hide
    lamorpa , October 5, 2011 1:55 PM
    crewton$1mil salary = 35% tax$1mil stock = 15% taxeasy way to take home 200k more on the same money.

    I would spend more time trying to get a job where I could choose or be given stock compensation, than spend time criticizing those who have one; But that's just me...
  • 6 Hide
    chomlee , October 5, 2011 3:30 PM
    These kind of bonuses I don't mind. Its when CEOs leave a company after making decisions which cause the company to tank and then get awarded with 100 Mil bonus to leave. Its also good to see that some CEOs actually refuse some bonuses.
  • 11 Hide
    mrecio , October 5, 2011 3:35 PM
    Redmond puts the average salary of Ballmer's peers at $15.8 million while Ballmer's compensation, had he received the maximum possible bonuses, would only amount to just under $2.05 million.

    So Steve ballmer is making 13.6 million LESS than his peers at other companies? I have to say his pay seems much more inline with reality when all of these other CEO's are getting way overpaid to stretch pennies by laying off workers. Microsoft is scoring points with me on this one.
  • -4 Hide
    alyoshka , October 5, 2011 4:14 PM
    I wonder if there are as many people in the world as much as his salary.
    Sounds like the budget of a country with the incentive as foreign lending.... unbelievable.
    Whatever happened to one of the greatest sins being greed? or sloth? and these Corps really act like saint peter.....
    Payments for achievements or salaries at the top levels are more than some few generations of lifetime pay aggregated by the same people working for the same company way down in the rungs....
  • -2 Hide
    alyoshka , October 5, 2011 4:18 PM
    Even if he was to eat 5 times a day at the choicest of places, stay in a hep hotel with room service etc etc and all the lavish things, even if he ate in new gold plate every meal, even if he flew from his door step to work every time he left his home/room, even if he and his family had a grand vacation every year, he'd still be left over with a hell of a lot of dough. Doesn't the world think anymore? You can eat only as much as you can digest, the rest is waste.....
    What an awful display of useless wealth in front of half a world full of undernourished kids and home less people.
  • 0 Hide
    Anonymous , October 5, 2011 4:58 PM
    Yes, a lot of people could use that money in response to an earlier post. So redistibution of wealth/class warfare is the way to go. If those people were the CEO of Microsoft they would get that money. Balmer gets that because he is the CEO of microsoft. Other peoples needs/wants are irrelevant. Can't believe the stupid comments on articles like this. It's called the american dream and CEO's of multi-billion dollar corporations deserve this compensation. "a lot of people could use that money, esp in this tough economy". What on earth does that have anything to do with this article. Compared with wall street execs gettting $100M bonuses for selling toxic mortgages you don't lump these people all in the same group. A lot of people could use a lot of things, namely common sense comes to mind. And undernourished kids and homeless, boo hoo. Being paid a total of 1.38 million to run a company with revenues of $40Billion is not being overpaid and what other people do or do not need is irrelevant. Why don't you go make 1.38 million and give all but the $40-$50K you need to live on for a year away. Quit being so damn ignorant, your just player haters and whiners
  • 3 Hide
    extremepcs , October 5, 2011 5:00 PM
    Poor guy. He's probably eating Ramen noodles and hotdogs on that measly $1.38 mil salary.
  • 1 Hide
    bak0n , October 5, 2011 5:23 PM
    Why is this news?
  • -5 Hide
    RipperjackAU , October 5, 2011 5:57 PM
    To the 5 people whom voted down my previous post above...

  • -4 Hide
    ProDigit10 , October 5, 2011 6:22 PM
    he's an overpaid human and an overpaid monkey!
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