Microsoft CEO Sees Pay Cut During Financial Shortfall

"A New Efficiency" indeed: Microsoft CEO Steve Ballmer was paid 5.5 percent less in Microsoft's last fiscal year than he was the year before, due largely to the software giant's first-ever drop in annual sales. Ballmer was paid $1.28 million in fiscal year 2009, down from the $1.35 million he made the previous year.

Ballmer's paycheck is composed of a salary and a bonus. He earned $665,833 in salary for the year, up slightly from the previous year. But his bonus dropped from $700,000 to $600,000 in the year. That drop was attributed to Microsoft's compensation committee, which evaluated Mr. Ballmer's performance. He could have received a bonus of up to $1.3 million.

Mr. Ballmer receives no compensation in the form of Microsoft stock, which is somewhat unusual. That is at his request, though he does own some 408 million Microsoft shares, about 4.6 percent of them overall. (Cofounder Bill Gates owns 8 percent of Microsoft's stock.) Ballmer's holdings are worth about $10 billion.

Microsoft froze salaries for fiscal year 2010 and lowered compensation for its top executives after posting its first-ever annual sales shortfall. Ironically, news of Ballmer's pay cut came the day he revealed Microsoft's "A New Efficiency" mantra for the Windows 7 launch. At a launch event in London on Tuesday, Ballmer said that "economic reality has undergone a fundamental shift over the course of the past 12 months." He called this change "the new normal," a statement that could be applied to his own earnings. "With less, do more," he said.

Of course, in Ballmer's case, it's not that much less.

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