Microsoft Says Ballmer is a Bargain Thanks to "Low" Pay

Steve BallmerMicrosoft founder and former CEO Bill Gates had an impeccable track record leading his company in decades of sustained growth and gains. In 2000 Microsoft appointed Steve Ballmer -- Microsoft's 30th employee, hired in 1980 -- to become CEO, replacing the retiring Mr. Gates. Since that time Microsoft share price has been on a decline, despite some successes such as Windows 7 and the Xbox 360 console.

With some shareholders calling for his head last year, Microsoft's board defended their embattled CEO. In a U.S. Securities and Exchange Commission filing yesterday (the company's annual "Proxy statement"), the board points out that Mr. Ballmer's compensation is remarkably low.

The main reason why Mr. Ballmer gets paid so little is that he declines to take Microsoft's "equity compensation plan" -- stock options. Mr. Ballmer instead takes a smaller cash payout. He says he made this choice because he's already such a heavy shareholder that ultimately his financial fortune is already tied to Microsoft's financial fate.

In the filing (thanks NeoWin!), Microsoft writes:

Ballmer's award under the Incentive Plan is payable entirely in cash, and is correspondingly smaller than those made to the other Named Executive Officers. As the principal 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.

Mr. Ballmer's base salary is currently $682,000 USD and his performance-based cash bonus is $1.365M USD. That's much less than the Microsoft-estimated industry average compensation of $1.4M USD in base salary and $4.5M USD in bonus payments.

And Mr. Ballmer has seen his compensation drop even lower when certain products fizzled.

Still Mr. Ballmer is hardly sobbing in his sleep about his poor pay. He owns 333 million shares of Microsoft stock -- an almost 4 percent stake -- behind only Bill Gates' 561 millions shares. Mr. Ballmer's current stock holdings are worth approximately $8.2B USD. And Mr. Ballmer's total net worth is estimated to be around $13.9B USD, good enough to make him the 46th richest person in the world and the 17th richest billionaire in the United States.

This year was a bit of an embarrassment for Microsoft. Windows Phone 7, the company's great mobile home has thus far crashed and burned. And in a symbolic event Apple and International Business Machines, Inc. (IBM) both passed Microsoft in market capitalization, one measure of corporate worth. It was the first time since 1996 that Microsoft had been bumped from the top spot.

Source: DailyTech

Tags: Microsoft, Steve Ballmer

Add comment

Your name:
Sign in with:
Your comment:

Enter code:

E-mail (not required)
E-mail will not be disclosed to the third party

Last news

Pokemon GO had the potential to net $1 billion a year
The report said that Hon Hai has invested about US$600 million in India
Market research firm IDC reports that in the third quarter of this year
Customers will only have to shell out 50% of the cost of their Galaxy S7 device
New flagship will launch in 2017
Patent hints at name of the upcoming Surface AIO
IBM, Globalfoundries and Samsung have chosen to use extreme ultraviolet (EUV) light to pattern transistors
Samsung Galaxy TabPro S - a tablet with the Windows-keyboard
The first Windows-tablet with the 12-inch display Super AMOLED
June 7, 2016 /
Keyboards for iOS
Ten iOS keyboards review
July 18, 2015 /
Samsung E1200 Mobile Phone Review
A cheap phone with a good screen
March 8, 2015 / 4
Creative Sound Blaster Z sound card review
Good sound for those who are not satisfied with the onboard solution
September 25, 2014 / 2
Samsung Galaxy Gear: Smartwatch at High Price
The first smartwatch from Samsung - almost a smartphone with a small body
December 19, 2013 /
HP Slate 7 is a 7-inch Android 4 Tablet PC with good sound
A cost-effective, 7-inch tablet PC from a renowned manufacturer
October 25, 2013 / 4

News Archive



Do you use microSD card with your phone?
or leave your own version in comments