Ballmer Gets Less than ‘A’ Grade in Compensation

Microsoft Corp. CEO Steve Ballmer was awarded 79 percent of his target bonus for the company's latest fiscal year, with the software giant citing falling profits for its Windows division and sluggish sales of the Surface tablet.

The $550,000 award was detailed in a securities filing Thursday and is tiny compared with Ballmer's $11.3 billion fortune in Microsoft stock. But it reflects the Microsoft board's dissatisfaction at a key turning point in the company's 32-year history as it tries to become a devices and services company, moving beyond mostly software.

Ballmer, 57, said in August that he'd step down within 12 months and Microsoft is searching for a new CEO.

Ballmer has long requested relatively low pay for the CEO of a major U.S. company, mainly because his wealth is already tied to Microsoft's fortunes. Including salary of $697,500, his total pay for the fiscal year that ended June 30 was valued at nearly $1.3 million, down 4 percent from the year before.

Over the year, Microsoft's adjusted revenue grew 4 percent to $77.3 billion but adjusted operating income fell 5 percent to $26.96 billion and earnings per share dropped 6 percent to $2.62. Earnings were hit by an 18 percent decline in operating income at its flagship Windows division, despite the launch of Windows 8 last October.

Poor reception of the newest operating system, which attempts to bridge the gap between tablets and PCs, has been cited by some analysts for accelerating the decline of global PC sales. Later this month, Microsoft is releasing a free update called Windows 8.1 that aims to fix some of the problems users have complained about.

The company also launched its first self-made tablet computer, Surface, last October. In July, it booked a $900 million write-down on excess Surface inventory and slashed prices to stimulate demand. It updated the...

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