Ballmer: Uninspiring performance and a small package

Head Microsoftie leaves board members unsatisfied

Steve Ballmer has failed to dazzle the Microsoft board in the last year, and his pay cheque seems to reflect that fact.

The Redmond firm's CEO bagged just a $685,500 bonus, which on top of his $682,500 salary and other compensation brought his total package up to June 2011 to just $1.38m, a figure that pales in comparison to many of his peers.

While the conference-stage-leaping Windows supremo insists on taking a modest payout, compared to other tech chief execs, the remuneration signals that the compensation committee, and the board, want to see a little more from the once-dominant firm.

The committee based its decision both on Ballmer's self-assessment, and on feedback from peers, as well as the company's performance.

On the plus side, it pointed to successful launches of Office 365 and the Kinect arm waving radar for the Xbox; partnerships with Nokia and Facebook; work towards the acquisition of Skype; and progress with Windows.

But the committee was less pleased with the "lower than expected initial sales of Windows Phone 7, the 2 per cent decline in revenue for the Windows and Windows Live Division and the need for further progress in new form factors".

However, Microsoft did have a strong financial year overall according to the committee, with record revenue of $69.9bn.

Shareholders should feel pretty good about their CEO, considering his modest salary is partly due to his own choice not to accept the equity part of Microsoft's incentives, leading the board to admit he's "underpaid for his role and performance".

But their eyes are glued to the less than impressive share price, which has been hovering around $27 for a few years now.

Microsoft is giving restless investors a 25 per cent boost in December dividends, which comes on top of a 23 per cent rise last year. The move should be enough to calm the herd for now, but the shareholders' frustration is also down to the fact that the heady world domination days of the 1990s are over for Microsoft - something that Ballmer will need to raise his game to change. ®