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Microsoft Board criticizes CEO Steve Ballmer for weakened smartphones, Windows

post #1 of 54
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After conducting an annual performance review of Microsoft CEO Steve Ballmer, the software giant's Board of Directors took him to task for poor sales of its Windows Phone 7 operating system, dampened Windows revenue and the "need for further progress" with new form factors, awarding him just half of his maximum yearly bonus.

The Redmond, Wash., company filed documents with the U.S. Securities and Exchange Commission on Monday detailing the review. Reuters pointed out that Ballmer's bonus of $682,500 for the most recent fiscal year matches his target award of his annual salary. But, the compensation is just half of the maximum prescribed.

The Board noted in its review of the executive that it took into account the fact that initial sales of Windows Phone 7 had been "lower than expected." Ballmer himself said earlier this year that sales of WP7 devices had gone from "very small to very small."

Microsoft directors also considered the 2 percent decline in revenue for the Windows and Windows Live Division had taken place under Ballmer's watch last year. In what has been perceived as a nod to rival Apple's iPad, the Board mentioned "the need for further progress in new form factors" in its review of him.

On a more positive note, Ballmer was given credit for successful product launches including Kinect and Office 365, key partnerships with Facebook and Nokia, and overseeing an "overall strong financial year" with record reported revenue and record operating income.

Ballmer's total compensation from Microsoft in fiscal 2011 totaled roughly $1.37 million, lower than some of his colleagues because he has declined awards in the form of stock. The company's board notes that Ballmer is "underpaid for his role and performance," while noting that he has a significant stake in the company. According to Forbes, Ballmer has a net worth $13.9 billion as of September 2011, with the majority of his wealth derived from his stake in Microsoft.



The Board's critiques remain similar to comments it made about Ballmer last year. In his 2010 review, they called 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" as weak points of his performance. Ballmer was also awarded just 50 percent of his total maximum bonus in 2010.

Microsoft's struggles in the mobile space stand in stark contrast to the meteoric rise of long-time competitor Apple's iPhone and iPad. In just a few years, the two devices have grown to become the bulk of the company's revenue.

The Windows maker has also struggled with its Zune players meant to challenge Apple's iPad. On Monday, all references to Zune hardware temporarily disappeared from Microsoft's website. The references eventually were re-added to the site, but the company has announced that it will "no longer be producing Zune players."
post #2 of 54
I'm surprised he only got 1.37m. I just assumed Ballmer was getting more than that.

They were right not to give him his whole bonus, but I still regard MS as a bigger threat to Apple long-run than Google/Android.

If they hadn't let their software stack bloat so much (e.g. .NET), and stuck with something fast like C, they could have had a smartphone OS based on largely the same API set as their desktop, as Apple achieved.
post #3 of 54
Ballmer should be giving back 1.37m instead, seeing as how he does everything backwards.
post #4 of 54
Quote:
Originally Posted by MacQuest View Post

Ballmer should be giving back 1.37m instead, seeing as how he does everything backwards.

He's isn't been highly effective in the ways I would have expected from MS, but MS has turned a healthy profit each and every quarter. That in itself should be worth more than $1.37M a year. That said, MS really needs some new blood in the company and I expect this is the beginning of the end of his reign as CEO.
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post #5 of 54
Mr. Steve Ballmer is a great leader . He has done such a fine job as MSFT CEO that he continue to unite both MSFT and AAPL supporters and both groups love Mr. Steve Ballmer a lot
post #6 of 54
Quote:
Originally Posted by solipsism View Post

He's isn't been highly effective in the ways I would have expected from MS, but MS has turned a healthy profit each and every quarter. That in itself should be worth more than $1.37M a year. That said, MS really needs some new blood in the company and I expect this is the beginning of the end of his reign as CEO.

I'm not sure he really cares about the salary. Did you note his estimated net worth? Even if the bulk of that is in Microsoft stock he can be considered independently wealthy. If you read the article he declined further payment in the form of further stock options.
post #7 of 54
This is what sleepwalking looks like. The bottom line is good so they don't change anything.

For me, Microsoft have lacked vision at one of the major turning points in their industry's history. Ballmer laughed at the first iPhone. That showed something. He didn't see what was coming. Dramatically so.

The Zune failed, the Kin failed (to put it mildly), WP7 has so far failed (it remains to be seen if Nokia can help that but Nokia are hardly having their finest hour either right now), Windows Vista was on this guy's watch. In the time since Ballmer took over Apple have overtaken Microsoft in key ways.

Microsoft's biggest product, Office, has virtually no monetized presence on a mobile device as the PC market shrinks. It cannot command the same retail price as it once did on the desktop either.

They have needlessly separated their various architectures so that WP7 bears no resemblance to Windows 7 or Windows Phone 6.5, limiting developer support.

The impression I have of Microsoft right now is of a ship in the fog; it doesn't know where it's going so it just keeps on the same heading and hopes it'll all come good. Apple have clear vision of where they are going. Google seem to, although i suspect they 'wing it' a heck of a lot but they can afford to because of the strength of their core search/advertising business.

Microsoft need vision. They're too corporate. They have the brand and the connections to be a huge player but so far they've looked tired and out of the game since the iPhone and Android came along. Things look ok on the balance sheet right now, but they have got to get back in the game if it's going to stay that way.

They now have a mountain to climb to get people to leave the App Store/Android Market system they have invested in, because they were too late.

We never got the Zune HD over here in the UK (I don't think anyway!) but we're expected to know what Zune means on our Xboxes? What is Zune? It's a stupid name for a service that never had an identity. Is it a player, is it a service? My point is that Microsoft seem completely unaware that nobody has any idea what Zune is outside the US. It just seems incompetent for a company of their size and little things like that make me just feel they lack cohesive, visionary direction at that top.

Windows 8 will be a huge release for them, one way or another. If that bombs, then alarm bells will really ring around Redmond. It will show that Windows has no future on tablets or phones and therefore no platform for Office as the desktop PC fades in importance. They would have to re-engineer much of the company. IF.
post #8 of 54
At this point in time, I have little interest in the well being of Microsoft. Having said that, they seriously need to kick this sorry sack of hot air out. That is if they want someone who's going to keep the company in business.
post #9 of 54
Churlish or not, I think it's time to remind people of this!

Ballmer laughs at the iPhone
post #10 of 54
It's no wonder the prospect of selling Windows appealed to Ballmer... He acts like a dodgy double glazing salesman.
post #11 of 54

Hope they never fire him.
post #12 of 54
I wonder how it looks on your personal bank account printout when someone transfers you 1.37M$ .
post #13 of 54
As a multi-billionaire, you wonder if a mere mil or two will motivate him much.
post #14 of 54
I was thinking of laughing at Ballmer when I read this news and then I wondered why I needed to laugh. I use a MBP for work (even though I need to work with .NET) & I use an iMac for my home. Between my wife and I, we have all iterations of the iPhone and the iPad. I bought my wife a MBA and I use a Time Capsule for backup. I love my iPod. That makes me a fan of Apple products and I admire Steve Jobs. But I think laughing at Microsoft, or any other company for that matter, seems like the "Ha! Ha!" kid on The Simpsons.

I am not taking a moral high ground. I just felt that I have no vicarious need to see Ballmer fired, or Microsoft fail, or Android disappear, or Google killed, or Samsung crash. I love reading everything that AI puts up and love reading posts by the grammar police, the DED stalkers and the trolls. But now, I feel sorry for someone like Ballmer. Not that he needs it.

I think, what I'm trying to say is ... ah f* it.... Ballmer - ha! ha!
post #15 of 54
Quote:
Originally Posted by broadbean View Post

As a multi-billionaire, you wonder if a mere mil or two will motivate him much.

I think it's a lot like salaries in sports. Take baseball, for example. Player X doesn't really care whether he gets $22.5M over the $21M that was offered, from a financial standpoint. He cares because Player Y is getting $21M, and Player X is absolutely convinced that he deserves more than that other guy.
post #16 of 54
Quote:
Originally Posted by bobborries View Post


Hope they never fire him.

That GIF really spooked me out!! But then a few seconds later I LOL'd so loud at work. hahaha brilliant!
post #17 of 54
Quote:
Originally Posted by ascii View Post

I'm surprised he only got 1.37m. I just assumed Ballmer was getting more than that.

They were right not to give him his whole bonus, but I still regard MS as a bigger threat to Apple long-run than Google/Android.

If they hadn't let their software stack bloat so much (e.g. .NET), and stuck with something fast like C, they could have had a smartphone OS based on largely the same API set as their desktop, as Apple achieved.

Ah, at least there's a sliver of justice in executive pay in the US. Just over 1 mil for the head of Microsoft is pretty paltry on a global scale. But apt for the failure of Microsoft in anything but Windows, Office and Xbox. I swear though whoever is running the Xbox360 division is on a different planet to Microsoft Central. The interface, user experience, gaming experience, console refinement, while not Apple-like, is pretty darn impressive. Kinect is a vastly superior experience to Playstation Move, swinging around that lighted dildo is just... sad. Anyways I'm never going back to PC gaming. Not for the next five years anyway. C'mon Apple, just a few more tweaks to ARM and you'll kill the Xbox360 and it's five-year-old tech. In fact maybe if Apple can pair the ARM with an ATI card it would be sweet. Or AMD's Fusion tech (pity about their fab problems though)... And ATI, my gawd, looks like they will never sort out their driver issues. Maybe ARM-PowerVR will be "the" next-gen console. With all the games and franchises in the pipeline though Xbox360 won't be going anywhere for another few years. Not unless Sony or Nintendo one-up them in a big way... which looks increasingly unlikely at this stage.

</gamer rant>
post #18 of 54
They may be falling in the mobile market but MS is doing well in the enterprise segment! I think that is the reason that Ballmer is in his job. Nonetheless they should try working on the mobile products for the enterprise soon. That is a segment which is not tapped on properly.
post #19 of 54
Quote:
Originally Posted by bobborries View Post


Hope they never fire him.

Dude you are my hero!
post #20 of 54
Quote:
Originally Posted by broadbean View Post

As a multi-billionaire, you wonder if a mere mil or two will motivate him much.

Not at all, but the action is publicly symbolic of the board's displeasure with him.
post #21 of 54
Quote:
Originally Posted by Jonamac View Post

Windows 8 will be a huge release for them, one way or another. If that bombs, then alarm bells will really ring around Redmond. It will show that Windows has no future on tablets or phones and therefore no platform for Office as the desktop PC fades in importance. They would have to re-engineer much of the company. IF.

Xbox360 and Xbox Live is the only thing really cutting ahead in the waters for Microsoft. Zune, WP7, Kin, WinCE, all floundering. Windows and Office is like an oil tanker. Hard to slow down, but also hard to turn around. PowerPoint 2010 was horrible on my colleagues' HP laptops at a recent project I was working on. Obviously I just used Keynote and people were kind of shocked at the difference. Even when at the end of the project I was converting my file to PowerPoint and doing cleanup it PowerPoint 2010 would behave properly on my VMWare Fusion but would encounter all kinds of weird bugs and crashes on a Windows laptop. It's not necessarily the Keynote conversion, because one colleague's laptop was fine and another's was grindy and crashy as anything.

One one of their laptops I noticed the guy when loading anything from the Windows desktop shortcuts he would constantly right-click and then click "Refresh" to keep refreshing the Windows desktop icons so things would be more responsive.

I think most average educated office workers that use an iPhone or iPad definitely wants to be able to use a Mac at work.
post #22 of 54
Guys like Balmer are not motivated by money any more. Balmer had enough money to retire by 1986. Steve Jobs was not motivated by money either. They like competing and trying to make their companies successful.

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post #23 of 54
>>>Zune players meant to challenge Apple's iPad.

The Zune is meant to challenge the iPod, not the iPad, isn't it?
post #24 of 54
Quote:
Originally Posted by justbobf View Post

>>>Zune players meant to challenge Apple's iPad.

The Zune is meant to challenge the iPod, not the iPad, isn't it?

I think the Zune is meant to challenge the toilet bowl.
post #25 of 54
Quote:
Originally Posted by solipsism View Post

He's isn't been highly effective in the ways I would have expected from MS, but MS has turned a healthy profit each and every quarter. That in itself should be worth more than $1.37M a year. That said, MS really needs some new blood in the company and I expect this is the beginning of the end of his reign as CEO.

Microsoft continues to ride its profitable current product line and generate both record revenue and operating income. It has been 35 years of success for Microsoft, and as Steve Jobs noted in one of his keynotes, for Apple to succeed, Microsoft doesn't have to fail, in spite of some of the back and forth between the two companies on different issues. The problem that the BoD of Microsoft perceives is that Ballmer has not generated the kind of foward-looking successes in the mobile space they rightly believe is the future of computing, and I think they nailed it. Steve Ballmer still seems to be wedded to the older desktop-bound concept of computing and only sees mobile computing as an extension of that, not as a part of the evolution of computing (true for many here as well).

And before some of you jump on that statement, let me remind you of what Jobs said in his intro to the iPad - desktop computers are like trucks, some of us NEED trucks, but most don't. So if you need a truck, use it. But most consumers just need a zippy little streamlined urban device *WINK* - which is where the iPad is taking a large number of consumers. Sure they can't tow along a huge boat-like package of Photoshop or InDesign or AutoCAD, but they don't need to. If they do they have the "truck" parked at home to get them where they need to go with those loads. But for the everyday routine runs around town - the iPad works just fine.

So Microsoft has enough momentum to continue successfully for at least another decade unless something else comes along that is even more disruptive to the overall computing environments currently in play, and I don't expect to see any sort of significant impact, just a continued erosion in the consumer space, and perhaps some in the corporate mobile space. But the key is to see if Apple can sustain its high profitability over an extended stretch of time - like Microsoft's 35 years. I think they can and will. Horace Deidu has some interesting comparison charts over at asymco showing what things look like right now for Apple and Microsoft, slide on over and take a look if you're interested.
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post #26 of 54
Quote:
Originally Posted by bobborries View Post


Hope they never fire him.

Dude, this totally made me laugh. Thanks for that! Great way to start the day.
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post #27 of 54
Microsoft pays 19 cents a share a quarter as a dividend. Last I checked Ballmer held something close to 350 milion shares of Microsoft. I am too lazy to figure out what that equals a year, but I am sure the amount is phenomenal. I probably also don't want to know.

In truth, Ballmer shouldn't get paid a dime as the money he is getting paid is meaningless, and he and Gates were responsible for the dividend knowing they'd be getting huge paychecks every quarter. The Board knows his real pay is the dividend based on the amount of shares he has been awarded.

Quote:
Originally Posted by solipsism View Post

He's isn't been highly effective in the ways I would have expected from MS, but MS has turned a healthy profit each and every quarter. That in itself should be worth more than $1.37M a year. That said, MS really needs some new blood in the company and I expect this is the beginning of the end of his reign as CEO.
post #28 of 54
I just don't understand. If I was his age and a worth over a billion $$$ I sure wouldn't be spending my time working. I would be travelling constantly, seeing new sights, and truly enjoying the second third or half (who knows) of my life.

Wouldn't you folks???
post #29 of 54
Quote:
Originally Posted by MacQuest View Post

Ballmer should be giving back 1.37m instead, seeing as how he does everything backwards.

I'm having trouble with all of the zeros. If he's worth 13900000000, and made 1370000 , what would be the equivalent salary for a middle class guy guy who is worth $100,000?

IOW, it looks to me like $1.3M is a drop in the bucket to him. I'm wondering how small a drop $1.3M is to a guy worth over ten billion.


Are we talking 1% or a fraction of 1%? Somebody who is comfortable with magnitudes please do this in your head.
post #30 of 54
Quote:
Originally Posted by TBell View Post

Microsoft pays 19 cents a share a quarter as a dividend. Last I checked Ballmer held something close to 350 milion shares of Microsoft. I am too lazy to figure out what that equals a year, but I am sure the amount is phenomenal. I probably also don't want to know.

In truth, Ballmer shouldn't get paid a dime as the money he is getting paid is meaningless, and he and Gates were responsible for the dividend knowing they'd be getting huge paychecks every quarter. The Board knows his real pay is the dividend based on the amount of shares he has been awarded.

You must be really lazy... It is 66.5 million dollars.
post #31 of 54
Quote:
Originally Posted by nvidia2008 View Post

I think most average educated office workers that use an iPhone or iPad definitely wants to be able to use a Mac at work.

Naw. If that were true, they would use a Mac at home. And almost nobody does.
post #32 of 54
Microsoft would turn a profit, for a bit, even if Ballmer was not around. What has he done to set them up for the future?
post #33 of 54
Lazy, and I wasn't sure I wanted to see the amount.

Quote:
Originally Posted by lamewing View Post

You must be really lazy... It is 66.5 million dollars.
post #34 of 54
Quote:
Originally Posted by lamewing View Post

I just don't understand. If I was his age and a worth over a billion $$$ I sure wouldn't be spending my time working. I would be travelling constantly, seeing new sights, and truly enjoying the second third or half (who knows) of my life.

Wouldn't you folks???

For people like Steve Jobs, Warren Buffett, or even Steve Ballmer, the challenge is the reward. Bill Gates moved on to charitable works (as did others before him like Andrew Carnegie and John D. Rockefeller). Right now Microsoft is being propped up by the products that Gates left the company (Windows and Office, and to some extent games). I'm sure Ballmer won't voluntarily give up the reins until he establishes the company in something else (e.g. mobile, tablets).
post #35 of 54
Quote:
Originally Posted by ConradJoe View Post

I'm having trouble with all of the zeros. If he's worth 13900000000, and made 1370000 , what would be the equivalent salary for a middle class guy guy who is worth $100,000?

IOW, it looks to me like $1.3M is a drop in the bucket to him. I'm wondering how small a drop $1.3M is to a guy worth over ten billion.


Are we talking 1% or a fraction of 1%? Somebody who is comfortable with magnitudes please do this in your head.

1/100%

Quote:
Originally Posted by solipsism View Post

He's isn't been highly effective in the ways I would have expected from MS, but MS has turned a healthy profit each and every quarter. That in itself should be worth more than $1.37M a year. That said, MS really needs some new blood in the company and I expect this is the beginning of the end of his reign as CEO.

True. Leo Apotheker got $25 million for 11 months "work" in driving HP into the ground, after getting another golden parachute from SAP. Microsoft has largely stagnated for the past decade, but that's partially a transformation of the market from growth to commodity (meaning stagnant financial performance isn't necessarily a bad thing or something easy to accomplish).

That said, I think they could use some new leadership, perhaps from outside the company. They should do some strategic acquisitions (such as what Apple did with Siri) to bring in some new ideas. Windows is a big market, and Windows 8 shows some promise, but it's been a while since the company has really "wowed" the market with anything.
post #36 of 54
"Sweaty monkey car sale man need more banana. Make Windows more better."
post #37 of 54
Quote:
Originally Posted by KPOM View Post

For people like Steve Jobs, Warren Buffett, or even Steve Ballmer, the challenge is the reward. Bill Gates moved on to charitable works (as did others before him like Andrew Carnegie and John D. Rockefeller). Right now Microsoft is being propped up by the products that Gates left the company (Windows and Office, and to some extent games). I'm sure Ballmer won't voluntarily give up the reins until he establishes the company in something else (e.g. mobile, tablets).

I am sure that having "the challenge is the reward" on their tombstone will be a fit reward.

At a certain point people need to take a bit of time to enjoy their lives and see the world versus always working...challenge be damned. A person can always find a challenge.
post #38 of 54
If this goes down the right way, for the first time, the phrase, "You're out, Steve," will be uttered by a company doing the RIGHT thing.

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post #39 of 54
Quote:
Originally Posted by bdkennedy1 View Post

"Sweaty monkey car sale man need more banana. Make Windows more better."



In all seriousness, he's a nightmare. M$ has done nothing but fail in product launches. Vista. Kin. Windows Phone 7. The slow erosion of Windows PC's dominance. M$ is living on its past products and it's dinosaur PC monopoly. Think about it...what has Ballmer done right other than bean counting? He is one of the most visionless leaders I've ever seen.

Man, I'm enjoying this.
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post #40 of 54
Quote:
Originally Posted by Jonamac View Post

This is what sleepwalking looks like. The bottom line is good so they don't change anything.

For me, Microsoft have lacked vision at one of the major turning points in their industry's history. Ballmer laughed at the first iPhone. That showed something. He didn't see what was coming. Dramatically so.

The Zune failed, the Kin failed (to put it mildly), WP7 has so far failed (it remains to be seen if Nokia can help that but Nokia are hardly having their finest hour either right now), Windows Vista was on this guy's watch. In the time since Ballmer took over Apple have overtaken Microsoft in key ways.

Microsoft's biggest product, Office, has virtually no monetized presence on a mobile device as the PC market shrinks. It cannot command the same retail price as it once did on the desktop either.

They have needlessly separated their various architectures so that WP7 bears no resemblance to Windows 7 or Windows Phone 6.5, limiting developer support.

The impression I have of Microsoft right now is of a ship in the fog; it doesn't know where it's going so it just keeps on the same heading and hopes it'll all come good. Apple have clear vision of where they are going. Google seem to, although i suspect they 'wing it' a heck of a lot but they can afford to because of the strength of their core search/advertising business.

Microsoft need vision. They're too corporate. They have the brand and the connections to be a huge player but so far they've looked tired and out of the game since the iPhone and Android came along. Things look ok on the balance sheet right now, but they have got to get back in the game if it's going to stay that way.

They now have a mountain to climb to get people to leave the App Store/Android Market system they have invested in, because they were too late.

We never got the Zune HD over here in the UK (I don't think anyway!) but we're expected to know what Zune means on our Xboxes? What is Zune? It's a stupid name for a service that never had an identity. Is it a player, is it a service? My point is that Microsoft seem completely unaware that nobody has any idea what Zune is outside the US. It just seems incompetent for a company of their size and little things like that make me just feel they lack cohesive, visionary direction at that top.

Windows 8 will be a huge release for them, one way or another. If that bombs, then alarm bells will really ring around Redmond. It will show that Windows has no future on tablets or phones and therefore no platform for Office as the desktop PC fades in importance. They would have to re-engineer much of the company. IF.

I pity you because you never got to experience the joy of squirting stuff at other people using your Zune. Or become part of the Social. Your life is that much poorer as a result...
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