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Originally published October 9, 2012 at 8:00 PM | Page modified October 10, 2012 at 7:48 PM

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Microsoft trims Ballmer's bonus

The company’s board awarded him 91 percent of his target bonus, citing modest growth in Windows Phone’s market share; a decline in Windows revenue; and the company’s failure to provide a browser choice screen on certain Windows PCs in Europe.

Seattle Times technology reporter

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Microsoft CEO Steve Ballmer received base salary of $685,000 in the fiscal year ended June 30 — up a tiny bit from the previous year — but the company’s board awarded him only 91 percent of his target bonus, or $620,000, according to Microsoft’s proxy statement filed Tuesday.

Last year, Ballmer made $682,500 in base salary and received 100 percent of his target award of $682,500.

The board cited the following factors in not awarding Ballmer the full bonus: modest growth in Windows Phone’s market share; a decline in Windows revenue; and the company’s failure to provide a browser choice screen on certain Windows PCs in Europe, as the company had agreed to do in 2009.

Positive factors the board cited included: success in completing development of Windows 8 and the new Office suite; the successful launch of SQL Server 2012 and System Center 2012, contributing to 12 percent growth in Server and Tools Business revenue; integration of Skype; and progress in introducing new hardware-form factors such as Surface — Microsoft’s own branded tablets. It also cited strong operating expense discipline and overall solid business performance.

The proxy statement contained information on other top executives’ compensation :

• Windows and Windows Live President Steven Sinofsky received 90 percent of his target award, with the board citing some of the same factors as for Ballmer: The decrease in the division’s revenue and the failure to provide a browser choice screen.

Sinofsky’s compensation included $658,333 in base salary, $1.5 million in bonus and $6.4 million in stock awards.

• Chief Financial Officer Peter Klein, whose compensation included $580,000 in base salary, $950,000 in bonus and $3.6 million in stock awards.

• Chief Operating Officer B. Kevin Turner, whose compensation included $762,500 in salary, $2.4 million in bonus and $7.5 million in stock awards.

• Office division President Kurt DelBene, whose compensation included $638,333 in base salary, $1.8 million in bonus and $5.4 million in stock awards.

The company’s annual shareholders meeting will be at 8 a.m. Nov. 28 at Meydenbauer Center in Bellevue.

Items on the agenda include re-election of nine members of the board. (Netflix Chairman and CEO Reed Hastings, who is the 10th member of the current board, will not be seeking re-election.)

Other items include a nonbinding vote on compensations to the named executives and a proposal to adopt cumulative voting. In such a system each shareholder may cast as many votes as equal to the number of shares held, multiplied by the number of directors to be elected. A shareholder can then cast all his/her votes for one candidate or divide them among several.

Separately, Microsoft on Tuesday published its annual report to shareholders, which included a letter from Ballmer talking about the company as one that provides devices and services.

He writes in the letter that there is “a fundamental shift under way in our business and the areas of technology that we believe will drive the greatest opportunity in the future.”

Ballmer took care to say that the company would continue to work with its many manufacturing partners in producing PCs, tablets and phones.

But he also said: “There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface.”

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com. On Twitter @janettu.

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