Microsoft CEO Misses Half of Bonus Amid Mobile Travails

Microsoft Corp. (MSFT) Chief Executive Officer Steve Ballmer received $1.26 million in compensation for the 2013 fiscal year, missing out on more than half of his potential bonus as the company struggles in mobile devices.

Ballmer received a bonus of $550,000, 79 percent of his base salary, for the 12 months ended June 30, the Redmond, Washington-based company said in a filing yesterday. He was eligible for as much as 200 percent of his base. Microsoft’s board cited disappointing sales of its Surface tablets and difficulties in the PC market for its assessment of the CEO’s performance.

Ballmer, who is retiring within a year, also received less than half of his maximum bonus in 2012 and half in the year prior because of shortcomings in the performance of business units including Windows and mobile phones. His salary was $697,500 for the past fiscal year.

Microsoft also said it will be increasing the target level of compensation for its senior executives in order to remain competitive. That’s in addition to a plan announced last month to provide special awards to key executives to keep them onboard during the transition to a new CEO and the shift in focus to devices and services.

The company, which introduced two new versions of its Surface tablets last month, entered the market dominated by Apple’s iPad and models running Google Inc. (GOOG)’s Android software last year. Designed to keep its Windows software relevant as consumers shift to tablets from personal computers and laptops, the Surface instead generated such little demand that Microsoft took a $900 million inventory writedown last quarter.

Photographer: Tomohiro Ohsumi/Bloomberg

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Photographer: Tomohiro Ohsumi/Bloomberg

Microsoft shares slipped less than 1 percent to $33.86 at the close in New York yesterday. The stock has gained 27 percent this year.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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