Microsoft's Steve Ballmer had his bonus dumbed down for Kin failure

Microsoft's CEO, Steve Ballmer, did not receive his maximum bonus for the last fiscal year, despite a record year with the company's highest ever sales.

54 year old Ballmer took a bonus hit due to the "unsuccessful launch of the Kin phone, loss of market share in the company's mobile phone business, and the need for the company to pursue innovations to take advantage of new form factors," according to a filing with securities regulators on Thursday.

The filing, reported by Reuters, shows that Ballmer received a cash bonus of $670,000 for the fiscal year ended June 30. Although the bonus is equal to Ballmer's salary, it's only half the maximum bonus payout. The revelation of a curbed bonus comes after a record year for Microsoft increased sales of Windows and Office thanks to two successful new product launches. Windows 7, which has overtaken Vista's market share, has sold over 175 million licenses; making it the fastest selling operating system in history.

Despite Microsoft's success with Windows 7, the company has had a poor year competing in the upcoming mobile and smartphone markets. Microsoft launched two Kin devices earlier this year but canned the project after only three months. Only around 10,000 devices were sold and Microsoft employees admitted to being embarrassed over the failure. The Redmond giant's Windows Mobile software has also been losing market share rapidly over the last few years due to competitive offerings from Apple, Google and RIM. Microsoft has also been widely criticised over its failure to respond to Apple's iPad device. The iPad has sold more than 3 million devices since it was introduced in April this year.

Ballmer's bonus hit the "target award" of 100% of his salary according to Reuters. The CEO was eligible to receive between zero and twice his base salary in bonus.

Image Credit: Photo Giddy (Flickr)

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53 Comments

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he should bring back j allard and bring back the Courier project, especially after BB, apple, adroid are coming out with one.

So ballmer must have been involved in a big way with the kin. Why it's clear he doesn't know much about phones. He was the one who said the iphone was to expensive and not good enough for business owners. Did he never hear about contracts and the touch screen made it a good business smartphone as well.

Would it not make sense to copy Apple in their approach to phone and tablet device operating systems? Windows Phone 7 on a tablet device, the marketplace is for both devices then and since the phone is touch screen friendly, that resolves the issue of Win7 not playing nice on a tablet.

MS needs to catch up in that market, copy what works and then add your own innovations or continue to be a very distant competitor.

zeke009 said,
Would it not make sense to copy Apple in their approach to phone and tablet device operating systems? Windows Phone 7 on a tablet device, the marketplace is for both devices then and since the phone is touch screen friendly, that resolves the issue of Win7 not playing nice on a tablet.

I bet something like this will eventually come - it's just a question on how big WP7 is gonna be. Doubt Microsoft will release a Tablet-Version if the phones are a commercial failure.

In all honesty dont think balmer cares to much about paycheck and bonuses... being coowner of MS (i think its around ~1%), he still have like 2+bilion in stocks. Buhu half of milion more or less...

djpailo said,
Windows 7 is amazing. Anyone deserves some sort of bonus for that.

Hey, I'm anyone! Where is my bonus? And yes, Windows 7 was my idea, Really!

djpailo said,
Windows 7 is amazing. Anyone deserves some sort of bonus for that.

Windows 7 was my idea. Where is my bonus?

Yeah, but that one product went REALLY bad. I could see sales being down, or the loss of market share, but a product launch the size of the Kin failing as bad as it did...

Elessar said,
Yeah, but that one product went REALLY bad. I could see sales being down, or the loss of market share, but a product launch the size of the Kin failing as bad as it did...

It wasn't a large product launch, and it was more on Verizon than it was on MS. They're a huge company, and it was a try it and see kind of thing, that failed. It happens, no company has 100% success with everything. Kin was a pretty small blip in the scheme of things.

MS Pandya said,

It happens, no company has 100% success with everything.

Apple? At least the media/Apple manages to put it that way every time they release something "new"...

MFH said,

Apple? At least the media/Apple manages to put it that way every time they release something "new"...

Apple Failures: iTV(first release), Newton, Pippin (know what that is?), I also remember an Apple TV device that I don't remember the name of. It was like a TV/PC combo. Anyone remember that?

NPGMBR said,

Apple Failures: iTV(first release), Newton, Pippin (know what that is?), I also remember an Apple TV device that I don't remember the name of. It was like a TV/PC combo. Anyone remember that?


Newton, Pippin: Who remembers them as failures? Specially the Newton is considered as "too soon". An the Pippin: Who remembers it at all?^^
iTV: Yeah it was definately a failure, but how big was the press coverage on this failure compared to lets say the KiN?

MFH said,

iTV: Yeah it was definately a failure, but how big was the press coverage on this failure compared to lets say the KiN?

You let the press decide everything for you?

All of those fails...any other person would have been fired, or at the very least, given no bonus. You don't fail with a $250 million write-off, lose market share, AND still get a bonus...ridiculous. That's corporate America (and most of the rest of the world) for you.

Elessar said,
All of those fails...any other person would have been fired, or at the very least, given no bonus. You don't fail with a $250 million write-off, lose market share, AND still get a bonus...ridiculous. That's corporate America (and most of the rest of the world) for you.

Sales were still high and Windows 7 was successful, just because one product went bad doesn't mean everything else did.

Elessar said,
All of those fails...any other person would have been fired, or at the very least, given no bonus. You don't fail with a $250 million write-off, lose market share, AND still get a bonus...ridiculous. That's corporate America (and most of the rest of the world) for you.

I do believe that the CEO's performance is measured by the performance of the company as a whole, not a single division... lol

Elessar said,
All of those fails...any other person would have been fired, or at the very least, given no bonus. You don't fail with a $250 million write-off, lose market share, AND still get a bonus...ridiculous. That's corporate America (and most of the rest of the world) for you.

It was still a very good year for Microsoft, and I have to say: Ballmer really seems to be enthusiastic about Microsoft.

At least they're not like AIG or any of those other slimy companies that almost brought this country to the ground and they still got their FULL bonuses from BAILOUT money.

thealexweb said,

Its not been a huge sucess, its just not selling as fast as Office 2007 did.


Well who would buy Office 2010 if he bought Office 2007? Be a bit more realistic, nobody is updating with every release - except mabey those who pirate software...
I bet Windows 8 will not sell as fast as Windows 7...

MFH said,

Well who would buy Office 2010 if he bought Office 2007? Be a bit more realistic, nobody is updating with every release - except mabey those who pirate software...
I bet Windows 8 will not sell as fast as Windows 7...

We have a few hundred employees and skipped Office 2007, so that's why we're updating to 2010. I wonder if many didn't do the same, since 2007 was such a major release. Big companies are often willing to skip those, and let the company weed out "child diseases" first.

Northgrove said,

We have a few hundred employees and skipped Office 2007, so that's why we're updating to 2010. I wonder if many didn't do the same, since 2007 was such a major release. Big companies are often willing to skip those, and let the company weed out "child diseases" first.

That's exactly what I meant. Office 2003 or before are those who will migrate to Office2010, not those who already own Office2007. Office2010 is by all means a minor release, all the big stuff came with 2007. (Ok, they added ligatures and so on via OpenType in 2010, but nearly nobody uses these anyway in private documents. Myself I don't even like ligatures^^)

MFH said,

Well who would buy Office 2010 if he bought Office 2007? Be a bit more realistic, nobody is updating with every release - except mabey those who pirate software...
I bet Windows 8 will not sell as fast as Windows 7...

win8 would still sell fast

there would be still significant number of user by that time using XP and vista
i estimate by 2012 windows 7 would be holding over 45% of the market
well xp+ vista around 39/40% if not less

MFH said,

Office2010 is by all means a minor release, all the big stuff came with 2007.

If your just using Office and have 2007, a lot of it is minor. If you happen to be using SharePoint 2010 however, Office 2010 suddenly becomes a rather major upgrade. The new collaboration features in the 2010 suite are compelling when that version of SharePoint is deployed.

That said, Outlook 2010 is a huge stability increase over Outlook 2007. I haven't seen Outlook 2010 seize up on me once since the day the suite was released for SA holders. I've just never seen this level of stability in Outlook before. It may not have many new features, but I'm pretty sure all of them actually work in full right now. (Note, I only use the x64 edition; x86 edition I can't speak for.)

MFH said,

Well who would buy Office 2010 if he bought Office 2007? Be a bit more realistic, nobody is updating with every release - except mabey those who pirate software...
I bet Windows 8 will not sell as fast as Windows 7...

Yeh people don't update every release, not everyone upgraded to 2007 you now so it was an even playing field for 2010 when it came out.

MFH said,

Well who would buy Office 2010 if he bought Office 2007? Be a bit more realistic, nobody is updating with every release - except mabey those who pirate software...
I bet Windows 8 will not sell as fast as Windows 7...

My company (40,000+) is standard on 2007 and we are already rolling out 2010.

MFH said,

Well who would buy Office 2010 if he bought Office 2007? Be a bit more realistic, nobody is updating with every release - except mabey those who pirate software...
I bet Windows 8 will not sell as fast as Windows 7...

Uhm and those in the open source and free software communities(ubuntu, opnoffice) dont have to pay either lol

Epic0range said,

My company (40,000+) is standard on 2007 and we are already rolling out 2010.


Has your company too much money?

oh damn, I wish my bonus was equal to my salary when I did well, but to have it cut to only $670,000 must be a bummer.... meanwhile in the real world

Huh, I don't know why but I kinda expected his salary to be over $670,000 a year o.O Wonder how much Jobs get

~Johnny said,
Huh, I don't know why but I kinda expected his salary to be over $670,000 a year o.O Wonder how much Jobs get

unless it has changed $1 a year

/rest is in options n stuff

~Johnny said,
Huh, I don't know why but I kinda expected his salary to be over $670,000 a year o.O Wonder how much Jobs get

Guys like Ballmer, Jobs and Gates, the salary is almost pointless. Jobs' takes a $1 salary for example, but he has huge share options and a very respectable expense account, including use of a private jet.

~Johnny said,
Huh, I don't know why but I kinda expected his salary to be over $670,000 a year o.O Wonder how much Jobs get

The salary for most CEO's doesn't matter and they hold huge stock options which I'm sure they've cashed in at some point to acquire enough cash to live a comfortable lifestyle. Not to mention the dividend paying shares that these guys hold. I think it's good that Balmer's salary is $670K and even better that Jobs' is $1. These guys run two of the most important tech companies on the planet and aren't being greedy about their salaries. I hope we see other companies' boards limit executive pay.

asdavis10 said,

The salary for most CEO's doesn't matter and they hold huge stock options which I'm sure they've cashed in at some point to acquire enough cash to live a comfortable lifestyle. Not to mention the dividend paying shares that these guys hold. I think it's good that Balmer's salary is $670K and even better that Jobs' is $1. These guys run two of the most important tech companies on the planet and aren't being greedy about their salaries. I hope we see other companies' boards limit executive pay.

Actually they are more greedy than you think. The reason Job's salary is $1 is to avoid heavy taxes for the upper tax brackets. Same reason why Ballmer keeps his below $1mil. They wait for when they can cash out on those options and not take as much of a hit on taxes. Google exec's do the same thing.

~Johnny said,
Huh, I don't know why but I kinda expected his salary to be over $670,000 a year

Nah - you're thinking of banking and financial execs, who make money for doing nothing except charging you and I more interest on what is really our money in the first place!.

People who actually have to produce something get paid far more reasonably.