Rough Year Gnaws At Microsoft Executive Pay

Microsoft has staggered through the past several quarters and has been hit hard by the decline in PC and server sales, so it's not surprising that CEO Steve Ballmer took a de facto pay cut of about 5.5 percent during Microsoft's fiscal 2009 year.

According to a Tuesday filing with the Securities and Exchange Commission, Ballmer received $1.25 million in total compensation in fiscal 2009, which ended June 30, compared to $1.34 million in 2008. Ballmer's base salary grew from $640,000 to $665,000, but his annual bonus fell from $700,000 to $600,000 during FY09.

Ballmer is the second largest Microsoft shareholder with more than 408 million shares, while Chairman Bill Gates holds more than 713 million shares, according to the SEC filing.

Other Microsoft executives also saw their annual bonuses drop when compared to their combined cash bonus and stock awards for fiscal year 2008.

Robbie Bach, president of the Entertainment and Devices division, received $5.6 million, or 27 percent less than last year. Stephen Elop, president of the Microsoft Business Division, received $4.2 million, or 45 percent less than last year. Microsoft CFO Chris Liddell received $2.97 million, or 30 percent less than last year, and COO Kevin Turner received 4.76 million, or 40 percent less than last year.

Microsoft saw its annual revenue fall three percent from $60.4 billion in 2008 to $58.4 billion in 2009, the first such decline in its history. The results were bad across the board, with operating income dipping nine percent to $20.4 billion, and earnings per share falling 13 percent to $1.62.

In January, citing the uncertain economic situation, Microsoft froze base salaries for its executive officers in fiscal 2010.