Microsoft board cuts Ballmer bonus, citing Windows and Surface RT challenges

Steve Ballmer at the Microsoft CEO Summit 2013. (Microsoft Photo).

Steve Ballmer at the Microsoft CEO Summit 2013. (Microsoft Photo).

Microsoft’s board gave CEO Steve Ballmer a smaller bonus for fiscal 2013 due to declining Windows profits and the struggles of the company’s Surface RT tablet, according to the company’s annual proxy statement, filed today.

Ballmer, who in August announced plans to retire from the company within 12 months, received a bonus of $550,000 for fiscal 2013, according to the filing. That was 79 percent of his target bonus for the year, and down from $620,000 a year ago.

Ballmer’s base salary, however, increased to $697,500, up from $685,000 last year. The CEO, who owns just under 4 percent of Microsoft’s stock, doesn’t take equity as part of his compensation.

“While the launch of Windows 8 in October 2012 resulted in over 100 million licenses sold, the challenging PC market coupled with the significant product launch costs for Windows 8 and Surface resulted in an 18% decline in Windows Division operating income,” the filing says as part of its summary of Ballmer’s performance. “Slower than anticipated sales of Surface RT devices and the decision to reduce prices to accelerate sales resulted in a $900 million inventory charge.”

Across the company, the filing cited areas of strength including record revenue of $77.8 billion operating income of $26.7 billion, in addition to revenue growth in the Microsoft Business Division, Server and Tools, Online Services Division, and Entertainment and Devices, coupled with strong demand for the company’s products among large companies.

In addition, the filing says, “Mr. Ballmer continued to lead the company in its transformation to a devices and services company in 2013 which culminated in the company-wide realignment as One Microsoft announced in July. The company continued to make progress in its devices and services strategy with the release of Windows Phone 8 and new versions of Office 365 for home and business use, continued progress with services like Outlook.com, Skype and Xbox Live, and growing adoption of Office 365, Windows Azure and Dynamics CRM.”

From the filing, here’s the table summarizing the compensation for Microsoft’s named executive officers for the past three years.comp

  • Guest

    Isn’t that at least three bonuses where each is a lower percentage than the former? Good things he “retired”. That kind of performance trend gets regular MS employees fired.

  • guest

    That bonus is in the 1% all by itself. I’d gladly take just his bonus even without his salary and stock options. And this is his reward for doing a bad job.