Steve Ballmer awarded 2% pay increase by Microsoft board

By Tom Warren, on 3rd Oct 11 9:38 pm with 51 Comments

Microsoft CEO Steve Ballmer

Microsoft revealed on Monday that CEO Steve Ballmer has been awarded a 2% pay increase.

The increase was revealed in Microsoft’s recent annual proxy statement filed with the Securities and Exchange Commission (SEC). Todd Bishop at GeekWire.com spotted the filing and notes that Ballmer received an increase in pay to $682,500 for the fiscal year of 2011, up around 2% from his pervious pay in 2010. Ballmer also netted an identical bonus to 2010, leaving his total compensation to around $1.365 million.

Microsoft’s incentive plans for Ballmer indicate that he could have received a 200% bonus but the filing revealed that Ballmer managed to secure a 100% bonus of his target award. Ballmer received the same amount in fiscal 2010. Ballmer receives a cash bonus as he already owns 3.95% of Microsoft. Ballmer’s significant ties to Microsoft’s performance and growth mean that his overall compensation is significantly less than other CEOs in similar roles. Microsoft recognized this in their filing with the SEC.

“As the principal leader of Microsoft, Mr. Ballmer focuses on building our long-term success, and, as a significant shareholder, his personal wealth is tied directly to Microsoft’s value,” the filing says. “While the Committee and the Board believe Mr. Ballmer is underpaid for his role and performance, they have accepted his request.”

Ballmer has faced a tough time over the past year, following calls for him to step down. Glassdoor.com, which allows employees to anonymously rates their employer, reports that 55 percent of employees disapprove of Ballmer and 45 percent approve, based on 1,691 ratings. An influential hedge fund manager called for Ballmer to quit in May. Microsoft’s board of directors supported Ballmer following the calls for him to quit. Microsoft’s nine-person board, including Chairman and co-founder Bill Gates, supported Ballmer at the end of May. Microsoft’s stock has suffered since Ballmer has been in charge but most analysts and investors feel it would be a hard task to find someone adequate to replace him.

Ballmer is due to speak at Dell World 2011 on October 14. Ballmer will likely detail the company’s cloud efforts with Azure but he could also discuss further Windows 8 details. Ballmer’s appearance at Dell World is expected to be his first public speech since the company’s BUILD conference in mid-September.

  • http://www.facebook.com/noe.brito Noe Brito

    Cool.

  • http://www.searingarrow.com AlienSix

    Hey an increase is an increase

  • Bnlf

    i wish i had 1% of that.

    • http://twitter.com/LachlanCMcLeod Lachlan C McLeod

      you wish you had 1 percent of 1.365 million?  You want $13650? LOL go get a job then its pretty easy to get that amount..  so the CEO of microsoft getting a 23000 dollar raise is healine news.. thats pretty messed up because that is penuts

  • Emi Cyberschreiber

    Good for Ballmer, i really like Steve Ballmer as a CEO.

    so when i read stuff like “Microsoft’s nine-person board, including Chairman and co-founder Bill Gates, supported Ballmer at the end of May.”
    then i think: so if even Bill Gates a really smart person and of course Microsoft founder nd chairman has supported him. why others think Ballmer should be removed, specially saying Sinofsky should automatically be CEO?

    oh well, its good for Steve Ballmer to get increase! that Microsoft Board is being nice!

    • Anonymous

      You are among the a few who got the right. Too many people think they are smarter than BillG, they are not.

    • Anonymous

      I like Ballmer as well.  He has a clear strategy and vision toward the 3 screens and a cloud future.  I think MS has been in the right direction for the past few years under his leadership.  There were definently some hiccups, Vista and the delayed response to iPhone, but Windows 7 and WP7 are great products, xbox/kinect are improving quickly, and Windows 8 looks damn right amazing.  So I yawn when I see people bitching about him.

      On a personal level, I think Ballmer is a lot more likable than Steve Jobs.  On the one hand, you have someone who is enthusiastic, perhaps a bit geeky, and doesn’t mind making fun of himself.  On the other hand, you have an arrogant egotistic prick who is notorious for abusing his employees and nurtures a weird cult of personality around him.  I’ll work for Ballmer any day over Steve Jobs.  Developers, Developers, Developers!

    • http://twitter.com/laserfloyd Lewis McCrary

      I’m not the biggest Ballmer fan but I don’t dislike him.  I’d much rather sit down to have a beer with him than someone like Steve Jobs.  Ballmer is certainly enthusiastic which can certainly be entertaining.  If Bill G. likes him then he’s ok in my book.

    • Anonymous

      yh i agree with you although mistakes were made
      He learnt from his lesson and now MS is starting to be serious
      He shouldnt go anywhere

    • Guest

      Unfortunately every time someone says Steve Ballmer i picture him running around like a loony screaming “developers” endlessly. 

    • Guest

      Ballmer has a clear strategy and vision for the future? Almost everything he’s done over a decade has been a reaction to someone else.

    • Anonymous

      What did WP7 copy? What did Kinect copy? What did Azure copy? What will Windows 8 copy?  Where did Ballmer copy the three screens and a cloud ecosystem from?  The only thing Apple did in the last 5 years was the iPhone.  The iPad doesn’t count because it just copied the iPhone.

    • Guest

      @AaronDotNET:disqus 

      WP7 didn’t copy anyone. But it was a reaction to iPhone wiping out ten years of MS’s efforts in mobile with their first release. Kinect is based on technology acquired from an Israeli company that Apple passed on. It’s a reaction in part to the success Nintendo had with Wii, by moving beyond the hardcore gamer and into the more lucrative casual and family market. Azure copied Amazon, Google, and Salesforce, among others. W8 copies many aspects of iOS and W7, which itself copies many elements of OS X. Xbox was a reaction to Sony in the living room. O365 is a reaction to Gapps. Hotmail finally doing more is a reaction to the sucess of Gmail.

    • phil jay

      It’s an reactive world, everything s reaction. They couldn’t come up with things like wp7 and win8, if they hadn’t been very actively investing in research all the time. They started deeply investigating touch long time ago.

    • Anonymous

      Wp7 is great product no doubt but as money products they clipped its wings too

    • Guest

      Gates is no longer focused on MS. I wouldn’t read too much into his continuing to support Ballmer. It could be he just hasn’t really taken a good hard look at what has transpired, especially over the last 2-3 years.

    • Anonymous

      If anything the last 2-3 years has seen a remarkable recovery by MSFT. Windows 7, Windows Phone 7, XBox Live, Windows 8(client & server) along with the Skype acquisition. Glory days are ahead!

    • Anonymous

      Don’t forget Bing, the money blackhole and Kin.

  • Anonymous

    One question, Why?

  • Anonymous

    Steve, you should take that 2% and reinvest it in more Developers, Developers, Developers, Developers!

    • Joe05

      He’ll probably put it into Apple. Even he can see it’s a better investment.

    • Anonymous

      thats one too many Developers!

    • Anonymous

      Heh, technically we’re both wrong: http://www.youtube.com/watch?v=8To-6VIJZRE

  • http://twitter.com/oolong2 oolong2

    A mil and change to a CEO running a company providing good software used by most around the world is a lot better than tens of millions to a CEO running a bank that just skims money from the world.

    • Guest

      Ask yourself this, do you want a good CEO or just a cheap one?

    • http://twitter.com/oolong2 oolong2

      Well if it were any other job I’d want a good AND cheap one ;-)

  • Anonymous

    “An influential hedge fund manager called for Ballmer to quit in May.”
    Can we go ahead and drop this silly reference now? I believe there were posts no more than a month or so after said influential hedge fund manager made this claim that his company then invested even more money in MSFT.

    • Anonymous

      Correction should be the hedge und manager who called for ballmer’s head turned out to be a very tiny shareholder….

    • Guest

      And of the most famous hedge fund managers in the world. But what does he know.

    • Guest

      Said hedge fund manager made the investment while calling for Ballmer to resign. He thinks Ballmer is a liability. I agree.

  • Anonymous

    out with his head, figuratively.

  • Anonymous

    Steve Ballmer is severely underpaid relative to other CEOs based on performance. Comparing him to Steve Jobs’ $1/year salary is bunk. Jobs had a huge stake in Pixar and other investments.

    • Guest

      Steve still has around 350M shares in MS. The stock pays a dividend of .20/share. Work out the math.

    • Guest

      Oh, and that’s per quarter.

    • Anonymous

      So Ballmer’s real compensation is $280 million a year? That’s absurd!

    • Anonymous

      He said do the math… $70 mill.

    • Anonymous

      and He’s VERY underpaid considering he co-founded the company and didn’t get fired. Cough*Jobs  Cough*

    • Guest

      He didn’t cofound the company.

    • Anonymous

      Balmer is “underpaid” compared to other Microsoft execs, but that’s not really a valid idea. His compensation is tied directly to the company’s performance, not just his division. His salary is not meant to be his main method of compensation. His stake in the company is much more important.

      Jobs takes a $1 annual salary at Apple, but his stake in the company grew according to his performance. Jobs’ stake in other companies is of no concern to Apple, nor should it be.

  • Guest

    “as a significant shareholder, his personal wealth is tied directly to Microsoft’s value”

    Oh please. Ballmer has already cashed in several billion, including a billion just last year. MS could go to $0 and he’d still be a billionaire. And the cost base on his remaining shares is zero. So any non-zero value is still a positive return for him.

    Ballmer should be fired and MS’s board should be replaced. The two of them are destroying the company.

    • Anonymous

      Who will fire the board?

    • Guest

      Who do you think? The only people who can.

  • Guest

    I guess accountability at MS only applies to regular employees, not the CEO.

  • http://profiles.google.com/elmsoftware John Lueders

    I believe he should take the $1 salary that some uber-rich CEOs take.  He doesn’t need the money nor the bonus.  His wealth is his shares.  He should forgo the salary and focus on the stock moving up.  Not taking money is a nice simple message to everyone about where your heart is.  His net worth is $14.5 billion (give or take) based on his shares.  Moving the shares in the positive direction is what matters.  Simply put if shares doubled, so would he…he would be at $29 billion in wealth…a +$1 million dollar salary/bonus is just not needed and unappreciated (being a shareholder).

    • http://twitter.com/LachlanCMcLeod Lachlan C McLeod

      I totally disagree.. if a CEO has all his money in the shares then they are more likely to care about short term growth so they can make a huge profit.. this mean being deceptive like certain other companies that lie about the truth around them

    • Guest

      That’s a danger. OTOH, it’s been more than a decade since Ballmer took over and the stock is less than 50% of what it was when he started. It’s pretty ridiculous that he and many other senior executives there have made tens of millions while shareholders have lost money.

  • Anonymous

    Bill Gates was and always will be the genius of Microsoft. Steve Ballmer is just the goof that got lucky to be friends with Gates back in the day. Now running the world’s largest software company and doesn’t care one bit for the last 10 years that the stock is FLAT. Shareholders want Ballmer out, get him out already.

    • Anonymous

      So true. Fortune by circumstance of knowing Gates, nothing more.

  • Anonymous

    Could anyone tell me a single product this guy brought which wasn’t already on the market?  Ballmer might have done some good but he is not a visionary. He refuses to take risks.. Look at the Courier for instance. How could he have axed something that promising? why are they not finding ways to push Surface to the consumer market? Or at least to business. Where did all the 1billion ad-campaign money for wp7 go?

     Bing is currently bleeding  money whiles they are splashing money on making deals to buy marketshare rather than improve services. If Microsoft wants to be relevant again they need to get rid of this guy.. Right now all the company’s future is based on win8 , what will MSs future be if it should fail?  

    • Anonymous

      Kinect is a good example.  Ballmer does not create products, neither did Steve Jobs, they only sign off on products.   He has taken some pretty big risks,  WP7 (abandoning all backwards compatibility) and Windows 8.    Surface is too expensive to push to consumers at the moment but they are working on it. Samsung is about to ramp up displays with pixel sense soon which will drive the cost down considerably.  
      I have found Bing to be a much better service than Google, but there is always room for improvement, and they are always improving it.   It is bleeding money at the moment because they are trying to gain market share.  They do have a plan to remedy that issue soon.   Everyone says Ballmer is doing such a horrible job but under his leadership we have seen MS be the most creative they have ever been, the warring between branches has died down a lot, and MS is breaking records on its earnings and sales.  I really don’t understand what people want Ballmer to do differently. 

  • http://profiles.google.com/carlosrfonseca Carlos Ribeiro da Fonseca

    He should come to Portugal, he would, at least, double his salary, maybe more.