Bonus Ballmer: Lagging WP7 Bites Bosses Pocket

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Microsoft boss failed to score his full whack bonus due to the lacklustre success of Windows Phone.

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According to Microsoft’s latest regulatory filing, boss Steve Ballmer has received a salary matching bonus of US$682,500 for the latest fiscal year, meaning his total compensation is just south of $1.4 million ($1.37m).

The filing with US securities regulators, indicated lagging Windows Phone 7 sales and “the need for further progress in new form factors,” was behind Ballmer getting a bonus just equal to his pay, which is decided on a salary plus incentive system.

The max the software boss is entitled to is double his wage or 200%. The bonus is the same salary matching figure he received last year although he is one of the lowest paid US CEO’s, according to Reuters.

However, despite the failing of Windows to reach tablets and “form factors” as outlined, which also saw a 2% drop in total sales, the filing did recognise Microsoft’s other achievements: Kinect hands-free gaming system for Xbox and the online Office 365, Windows Azure, Bing search engine, which has increased market share to 27% according to the filing.

Windows 8 for tablets is due out early next year and might give Ballmer the ‘double your pay’ compensation bonus if it takes off.

The software giant’s bottom line is also on the up under Ballmer with net income increasing 23% to $23.15 bn while operating income also jumped 13% to $27.16bn.

Windows 7 Phone was also met with “a positive reception as 9 out of 10 customers would recommend it to a friend” and will “deliver over 500 new features this fall” the filing states.

The multi million dollar deal with Nokia penned this year as well as separate deals with both Yahoo! and Facebook were also mentioned.

From almost the outset, the CEO requested that he receive no stock compensation, and already owns 3.95% of Microsoft’s shares although other bosses including Kurt D. DelBene, Windows Office President and Peter Klein, CFO.

Ballmer who has worked at Micrsoft for 31 years and took over from Bill Gates in 2000 is the 33rd richest person in the world with a fortune of $14.5bn, according to Forbes.

However, the 55 year old is underpaid for his performance, Microsoft board of directors believes.

 

“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. While the Committee and the Board believe Mr. Ballmer is underpaid for his role and performance, they have accepted his request.”

The filing for fiscal 2011 also states Mr. Ballmer has been “the driving force behind the strategies and operational excellence that have resulted in revenue tripling and operating income growing one and one-half times since he became Chief Executive Officer.”

This is despite Windows failing in the tablet race  against rival Apple and Google. 

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