Steve Ballmer Got Only 79% Of The Total Eligible Bonus Due To Windows 8, Surface RT Missteps

Microsoft’s current CEO Steve Ballmer got only 79% of his total eligible bonus set for him by the board due to the slow growth in Windows 8 and Surface RT write off. The information was revealed in the proxy statement filed by Microsoft yesterday.

The fiscal 2013 proxy statement gave the following reason on Ballmer’s bonus:

“The company faced challenges due to weakness in the consumer PC market. While the launch of Windows 8 in October 2012 resulted in over 100 million licenses sold, the challenging PC market coupled with the significant product launch costs for Windows 8 and Surface resulted in an 18% decline in Windows Division operating income. Slower than anticipated sales of Surface RT devices and the decision to reduce prices to accelerate sales resulted in a $900 million inventory charge.”

Steve Ballmer received a total of $1.26 million in fiscal 2013 which includes a base salary of $697,500 and a bonus of $550,000. Even though CEO was not able to earn his full bonus, no.of other VPs including Chief Operating Officer Kevin Turner, Chief Financial Officer Amy Hood, Office president Kurt Delbene, Server and Tools chief Satya Nadella received their full bonus amounts.

via: ZDNET

  • Guest

    IIRC, that’s his lowest percentage yet. Not surprising given what transpired during the year. And wow, that quoted paragraph really plays fast and loose with the truth. I mean there’s putting a positive spin on things and just misrepresenting. This tips too much towards the latter.

  • PoohGQ

    For everyone’s sake. please note that a write off and a write down are 2 different things. Surface RT was not a “write off” but a “write down”

    • Beancounter

      Or more accurately the $900M was a write down of various things Surface related, not just RT (though that was the majority). There could still be a write off to come if they’re unsuccessful moving the now written down inventory.

    • SocalBrian

      A write-off usually completely removes an item from the balance sheet while a write-down usually leaves the impaired asset on the balance sheet (at the lower value). A write-down and a write-off of equal amounts have basically the same (negative) effect on the balance sheet – so they are more similar than they are different.

      • Guest

        More similar than they are different != the same. He’s entirely correct, they’re two different things.

        • SocalBrian

          No he’s not. A write-off is basically a worst case write-down (i.e. a 100% write-down) as far as the accounting goes. A $900 million write-off and a $900 million write-down have basically the same net effect on earnings. The only real positive is that write-off says the inventory has no real value, while a write-down says the inventory still has some value (just less than you thought).

          • Guest

            Oh FFS. Seriously?!? Is this some Clintonesque attempt to word game the meaning of “different”? Different = not the same. Even your “The only real positive is that write-off says the inventory has no real value, while a write-down says the inventory still has some value (just less than you thought).” confirms that they’re in fact different. Indeed it shows one of the most important ways in which they differ. Hence the reason each has its own unique definition. Pointing out they can have a similar impact on earnings [unsaid but important] in any one year, doesn’t negate that.

          • SocalBrian

            The only people attempting to play word games are the people pretending like a massive write-down is somehow better than a massive write off. This “whew! at least it wasn’t a write-off” fantasy is just that.


    • Bugbog

      Just what I was going to comment on! This Surface related write-down merely means, for the purposes of financial reporting, that certain stock has not yet been sold.

      And, for instance, there are many differences between unsold stock like the Surface devices, and that of BB10 devices (or possible others), namely

      – Surface devices are independent wireless tablets. They are still being sold, yes at a lesser price, but that does not necessarily indicate that they have lost any intrinsic/core value cost!

      BB10 devices, on the other hand, are network specific models/items, sold through carriers, that have (or are) being returned to carriers, then back to BB, which will likely result in them being “dumped”, either through their website, or that of others.

      – Surface devices are from Microsoft, a long-term and currently highly profitable and stable company, that has Overtly doubled-down on its commitment to Mobile/tablet computing. With their own outlets, that of their partners, and those of others, they do not have any worry of being curtailed in offering the Surface devices to which they to the write-down. (Confidence of which was shown in their recent Surface event, showing the OG Surface RT as a continued entry offering!).

      – In addition to the above, there will be no worries in receiving updates for the Surface devices, unlike those from BB (or unlike those from HP/Palm)

      So, despite Microsoft’s write-down of Surface stock (for the 2013 financial year), unlike the write-downs of other Companies, this is no way indicative of the ‘failure’ of Microsoft’s Surface/RT program!

  • Yuan Taizong

    ¿Will he get his bonus after Windows 8 starts to kick arse?

  • NegLewis

    Bad timing it was.
    MS was right.
    People want Powerful PC’s in a tablet Form Factor.
    This all mess it’s Intel fault.

    Intel had bought some “Low Power” ARM Super-Engineers a couple of years ago (some teams/companies that Intel Bought) that do nothing constructive at Intel (yet).

    Intel had single handled destroyed all Intel-CPU related markets: from Laptops to servers and beyond.

    Where is AMD? They even exist?
    Why Intel has no true Low Power CPU?

    Refurbished Atom Architectures are not Low Power at all.
    Atom has the lowest of the low reputation – even if modern Atom CPU’s are… somehow lighter and powerful.

  • José Villaró

    Frack, could I get at least 5% of that? I’d use it to buy MS’s products I swear!