Set Steve Ballmer's Salary

Microsoft recently announced that it will allow shareholders to hold a non-binding vote on how much CEO Steve Ballmer should be paid. If it were up to you, how much would you pay Ballmer?

Brad Smith, Microsoft's general counsel and board secretary, had this to say in a press release about the plan to let shareholders vote on Ballmer's pay:

"Given the interest in executive pay, we think it makes sense to encourage more dialogue with our shareholders on our compensation approach. Our executive compensation program is designed to maximize shareholder value by attracting and retaining world-class leaders and aligning their financial rewards with the growth and success of the company."

Undercutting that, though, is that the vote is non-binding. So no matter what shareholders say, it may not affect Ballmer's salary and bonus.

Count me among those who don't think that Ballmer has earned his pay. According to the Associated Press, Ballmer's base salary was increased by 4 percent at the start of the 2009 fiscal year, up to $665,883 from $640,833 in the previous year. In 2008, he also got a $700,000 bonus; no information is yet available on his bonus for 2009.

Ballmer got the raise during a year when Microsoft's profit dropped 17 percent. Even worse, according to the Associated Press:

"Microsoft's 2009 earnings fell to $14.6 billion from $17.7 billion in 2008. Sales dropped 3 percent to $58.4 billion, the first time its revenue declined since it went public in 1986."

It's true that you can't blame Ballmer alone for all this. After all, we've been in the worst economic condition since the Great Depression. But he certainly hasn't made things better. In fact, you can easily argue that he's made things worse. He's well known for his bombast and revels in it -- it's part of his persona. The problem, though, is that he doesn't back up that bombast with anything. Microsoft is losing badly on the Web to Google, and Office is under attack from Google Apps. Vista was a financial disaster. And Ballmer presents no clear ideas about Microsoft's vision for the future.

There are plenty of very smart people working at Microsoft, and in recent months, as I've written, Microsoft has got its mojo back. But I don't attribute most of that to Ballmer. If I were choosing his salary, he'd get a pay cut, not an increase.

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