Follow us:

Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

September 29, 2008 at 2:05 PM

Nice timing: Microsoft discloses executives raises, bonuses

The big winner this year appears to be Chief Operating Officer Kevin Turner, who received the biggest bonus and salary award.

But all the top executives at Microsoft received raises and higher bonuses in fiscal 2008 than in fiscal 2007.

The pay is apparently weighted to favor earnings performance over stock price gains, since MSFT was a snooze over that period.

Here’s the pay chart, from a proxy filing:


As it has in years past, the board offered to give Chief Executive Steve Ballmer a salary more in line with other big company bosses but he declined, according to the proxy:

“During this period, the average total compensation for the CEOs of our peer group companies was $14.6 million. In contrast, Mr. Ballmer’s total compensation for fiscal year 2008 was $1.35 million.

As the principal leader of Microsoft, Mr. Ballmer focuses on building the company’s long-term success, and, as a significant shareholder, his personal wealth is tied directly to sustained increases in Microsoft’s value. While the Compensation Committee believes that Mr. Ballmer is underpaid for his role and performance, it has accepted his recommendation to continue with Microsoft’s historical practice for setting his total compensation opportunity.”

Ballmer’s Microsoft shares — 4.51 percent of the total — were worth $10.25 billion as of 4 p.m. Monday.

A few anomalies in the pay report reflect deals made when the company hired Turner and Chief Financial Officer Chris Liddell.

As part of their relocation deals, Microsoft offered to buy their houses if they didn’t sell quickly enough. That happened, and Microsoft took losses when it sold both: $2 million on Liddell’s place, and $254,000 on Turner’s.

What did they do to deserve the bonuses? Here’s a sample of the “performance commitments” against which the executives were judged, taken from the proxy:

Liddell: improving and streamlining reports and financial processes such as strategy, target setting, and budgeting; delivering on all of the finance function results for Sarbanes-Oxley Act compliance, investment returns, workplace infrastructure, and share buyback programs; and managing and continuously improving investor relations.

Johnson: the successful integration of the aQuantive acquisition; the financial performance for the Client and the Online Services Business; and driving results on key strategies for digital advertising and online services.

Raikes: the financial performance for the Microsoft Business Division and the Server and Tools Business; progress on product development; and key product launches.

Turner: financial performance; growth in emerging markets; driving customer satisfaction; unit volumes; segment and category sales; marketing effectiveness; and increasing productivity.

Executive compensation hasn’t been a big issue at shareholder meetings, but investors will have a chance to weigh in on this and other topics at the company’s annual meeting at 8 a.m. Nov. 19 at Meydenbauer Center in Bellevue.



No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.

The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.

The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited content access is included with most subscriptions.

Activate Subscriber Account ►