Microsoft's Ballmer loses big bonus over Kin, phone, tablet failures

Microsoft's annual proxy filing to the SEC shows that Ballmer didn't exactly receive a ringing endorsement from the company's compensation committee. He only received half of his possible bonus due to failures related to the Kin, mobile phones, and tablets.

According to the the filing Ballmer was eligible for a bonus this past year of between 0% and 200% of his base $675,000 salary. He received 100% --- not exactly a ringing endorsement.

On the positive side of Ballmer's ledger, the filing cited a series of successes, including the launches of Windows 7, Office 2010, Bing, Windows Server, and SQL Server. It also noted "progress pursing new innovations that will position the Company to lead the transformation to the cloud (Azure and Office Web Apps) in active gaming (Kinect), and in other product areas in which work is well underway."

Then, though, it lowered the hammer and pointed out:

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.

"New form factors" means tablets like the iPad.

The most disturbing thing about this for Microsoft is that most of the successful launches this year were for existing products that already sell well, and in which Microsoft has a long-standing lock on the market, such as Windows and Office. Bing is a notable exception.

The failures --- mobile phones and tablets --- are areas in which innovation and vision are required, and where the greatest growth is. A year from now, if Microsoft doesn't make a comeback in mobile and successful tablets launched using its operating system, I would expect Ballmer to get even less of a bonus, or worse.

Still, at a total pay package of $1.34 million, Ballmer isn't going to be crying into his beer --- or given his salary and net worth, into his high-end Bordeaux. And the truth is, considering his total net worth, even if he received his full bonus, it would make no difference in his financial life --- he's the 16th richest person in America, says Forbes Magazine. Ballmer is clearly not in it for the money, but for proving that he still has the vision to lead Microsoft.

A year from now, when the next bonuses are revealed, we'll see whether the company's compensation committee still thinks he has what it takes. This year's bonus was less than a ringing endorsement.

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