Given the economic hard times and the fact that Microsoft had some pretty spectacular fiscal achievements in 2008, Steve Ballmer’s pay for the year was reasonable, almost saintly (compared to the greed of other tech execs). He was paid $640,833 in salary, plus a $700,000 bonus and $10,001 in other compensation. He did not receive any equity-based compensation in 2008 — nor in fiscal ’07, when his pay package was $1.3 million. Yet Microsoft grew its revenue and profits by 18% and 26%, respectively, in its 2008 fiscal year, which ended June 30. Revenue was $60.4 billion, up from $51.1 billion in the prior year. Net income rose to $17.7 billion, up from $14.1 billion.
True, Microsoft has since announced layoffs, and its stock has been flat for years, but Ballmer’s $1.4 million in total compensation seems to fairly reflect that especially when compared to others such as Sun CEO Jonathan Schwartz’s pay package. Most of that was in stock and option awards valued at $9 million at the time they were awarded but, he received a $1 million salary, plus this little gag-inducing fact … he got a $1.04 million performance-based cash bonus, and $58,366 in other compensation (most of which was attributed to the cost of a car and driver for Schwartz). That’s an increase of 44% from fiscal 2007, when he received compensation valued at $7.7 million. And what was the performance that earned Schwartz a million dollars? A drop in profits. In its 2008 fiscal year, which ended June 30, Sun reported revenue of $13.88 billion, an increase of 0.1% over the $13.87 reported in fiscal ’07. Profits (net income) fell 15% to $403 million, down from $473 million.
But other executive pay packages also make you want to shake your head. IBM’s Sam Palmisano earned nearly $21 million in a package that includes a $1.8 million salary; $5.5 million performance-based bonus; plus hefty stock options and awards worth an estimated $12.22 million at the time they were granted; and ANOTHER $1.44 million in perks (including $493,881 for personal use of a company aircraft). Really, with a $1.8 million salary, can’t Palmisano pay for his own vacation travel? At least IBM is making big enough bucks to provide some justification for paying the CEO such huge sums of money. It reported revenue of $103.6 billion in 2008, up 5% from 2007’s $98.8 billion. Income for the year ended Dec. 31 came in at $12.3 billion compared with $10.4 billion, a jump of 18%.
John Chambers’ 2008 pay package included a $375,000 salary, a $3 million performance-based cash bonus, and $9,087 in other compensation — but the bulk of it came from stock and option awards worth an estimated $8.9 million when they were awarded. Unlike Palmisano, Chambers actually flies his personal jet for business at his own expense. His package fell roughly 4% from fiscal ’07, when he received compensation valued at $12.8 million. The company, meanwhile, saw bigger gains in its 2008 fiscal year, which ended July 26. Cisco reported revenue of $39.5 billion, a gain of 13% over the $34.9 billion recorded a year earlier. Net income hit $8.1 billion, up 10% from $7.3 billion in fiscal ’07. But like Microsoft, Cisco’s stock price has been flat forever.
Still, while Steve Ballmer has shown himself to be a not-so-greedy-guy (though most Americans would be loving life on his salary), the only true saint on the list is Steve Jobs, who once again was paid $1 (yup, one dollar), with no stock options or other goodies — even though Apple had a killer 2008 year.
Visit the Microsoft Subnet web site for more news, blogs, podcasts. Subscribe to all Microsoft Subnet bloggers. Sign up for the bi-weekly Microsoft newsletter. (Click on News/Microsoft News Alert.)
IE8 arrivesServer Core 2008 – SQL Server not supportedWill Microsoft’s newest board member improve R&D Deliverables? Standards Compliant IE8 + IE7 Compatibility Mode: Blessing or Curse?Six of the best gadgets from Microsoft TechFestReader’s Choice for Best Windows open source Projects Microsoft to give away one million training vouchers Follow Microsoft Subnet on Twitter
