Microsoft Cuts Ballmer Bonus Citing Sluggish Online Unit

Microsoft Corp. (MSFT) trimmed the fiscal 2012 bonus for Chief Executive Officer Steve Ballmer, citing slower-than-planned progress in its online services division and failure to comply with an agreement with European regulators.

Ballmer’s bonus was $620,000, below the target and less than half the possible maximum bonus of $1.37 million, according to a regulatory filing yesterday. It was also lower than $682,500 a year earlier. Ballmer’s salary was $685,000.

Board members who set Ballmer’s bonus considered the lackluster rebound in the money-losing online division, modest market-share growth for Microsoft’s mobile software and the company’s failure to meet requirements of a 2009 agreement with the European Commission. Those shortcomings were offset by the completion of new products, the integration of Skype -- the Internet-calling provider acquired for $8.5 billion last year -- and “overall solid business performance,” Microsoft said.

Peter Wootton, a spokesman for Redmond, Washington-based Microsoft, said most Microsoft executives have earned a bonus equal to 90 percent to 120 percent of their base salary. Ballmer’s bonus was 91 percent of his salary. Ballmer, who ranks 48 on Bloomberg’s Billionaire List, doesn’t receive stock compensation at his own request.

Microsoft fell 0.7 percent to $29.09 at 9:31 a.m. in New York. The shares had climbed 13 percent this year through yesterday.

To contact the reporter on this story: Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net