Bekker's Blog

Blog archive

Ballmer's Successor Likely To Have a Bigger Paycheck

Steve Ballmer's replacement as Microsoft CEO is likely to take home a much bigger annual paycheck.

Ballmer, who has been CEO since 2000 and was under pressure to leave from activist investors, announced in August that he would retire within the next 12 months. 

On Friday, Microsoft posted its 2013 proxy statement, and there was some media attention paid to the relative meagerness of Ballmer's bonus. He earned $1.26 million for the year, which consisted of a base salary of $697,500 and a bonus worth 79 percent of that at $550,000.

On a percentage basis, it was the lowest of the bonus payouts to named executive officers in the statement. In explaining Ballmer's bonus, the proxy statement balanced record revenues against the 18 percent decline in Windows operating division revenue and the $900 million Surface RT inventory charge.

That aside, the proxy statement makes clear that the Compensation Committee of the Microsoft Board of Directors believes that Ballmer, by his own request, is severely underpaid.

A chart labeled "CEO pay comparison" shows Ballmer's maximum compensation could have been $2.1 million, compared with a "Dow 30 and Technology Peer Group (average)" of $16 million.

[Click on image for larger view.] The "CEO pay comparison" chart from Microsoft's 2013 proxy statement.

"Consistent with longstanding practice and his request, Mr. Ballmer does not participate in the equity component of the Incentive Plan. His award is payable entirely in cash, and is correspondingly smaller than those made to the other Named Executive Officers," the proxy statement read. "As the principal leader of Microsoft, Mr. Ballmer focuses on building our long-term success, and, as one of our largest shareholders, 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."

Ballmer owned 3.99 percent of all common shares of Microsoft stock as of Sept. 13.

The other named executive officers listed in the proxy statement's 2013 compensation tables all took home much higher pay packages (mostly in stock awards):

  • Kevin Turner, COO, $10.4 million
  • Satya Nadella, president, Server and Tools Business, $7.7 million
  • Kurt DelBene, president, Microsoft Office Division, $7.6 million
  • Amy Hood, CFO, $7.5 million
  • Peter Klein, former CFO, $4.1 million

Posted by Scott Bekker on October 07, 2013 at 8:53 AM


  • Microsoft Highlights Upcoming SharePoint Support Deadlines

    The SharePoint "workflows" component stands to lose support this year in SharePoint 2010 Online, and will be deprecated in SharePoint 2013 Online.

  • The 2020 Microsoft Product Roadmap

    From the next major update to Windows 10 to the next generations of .NET and PowerShell, here's what's on tap from Microsoft this year.

  • 2020 Microsoft Conference Calendar: For Partners, IT Pros and Developers

    Here's your guide to all the IT training sessions, partner meet-ups and annual Microsoft conferences you won't want to miss. (Now updated with COVID-19-related event changes.)

  • Microsoft Closing Most of Its Retail Stores

    Microsoft on Friday announced a major shift in its retail operations, with plans to close most of its physical Microsoft Store outlets in favor of online sales.

RCP Update

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.