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Poor Windows 8, Surface RT performance means pay cut for Ballmer

post #1 of 50
Thread Starter 
Microsoft CEO Steve Ballmer saw his pay docked this year as a result of the disappointing performance of the company's Windows Division over the past year.



The Microsoft head received $1.26 million in compensation for fiscal 2013, with $697,500 of that in base salary and $550,000 in bonuses. Ballmer's "incentive plan award" for 2013, which is calculated by the Microsoft board, was only 79 percent of the total he could have gotten, while in 2012, Cnet notes, the Microsoft chief received 91 percent of his eligible incentive award.

The reason for the pay dock: the continuing poor sales of devices running Windows 8 the spectacular failure of the company's Surface RT device. Microsoft's latest operating system has underperformed since its launch, and the firm's fiscal 2013 proxy statement points to those shortcomings.

The report cites "weakness in the consumer PC market," a continuing issue for Microsoft as consumers increasingly turn away from traditional PC form factors in favor of smartphones and tablets running iOS or Android. Microsoft has sold more than 100 million Windows 8 licenses since the platform's launch, but that is well below what the company had expected.

Adding to the Windows Division's woes, the Surface RT device Microsoft rolled out last year met with middling reviews and virtually nonexistent consumer demand. Microsoft eventually wrote down $900 million worth of unsold inventory. The company has since shown off new versions of its tablet devices, but the poor performance of the last generation still dragged on Ballmer's compensation.

All told, the sales woes for the PC market and product launch costs for Windows 8 and Surface resulted in an 18 percent decline in Windows Division operating income.

The report is not entirely negative regarding Ballmer, as it notes that "the Committee and Board believe Mr. Ballmer is underpaid for his role and performance." That feeling, though, was insufficient to earn the Microsoft chief his full incentive payment. A number of other Microsoft managers received 100 percent of their incentive payments, including COO Kevin Turner and CFO Amy Hood. The head of the Servers and Tools unit received 105 percent of his eligible award, as that division pulled in more than $7 billion.

Ballmer shocked the tech world some weeks ago by announcing that he will leave Microsoft within the next year, and the company's search for a successor is ongoing.
post #2 of 50
"the Committee and Board believe Mr. Ballmer is underpaid for his role and performance." - Blimey! Talk about deluded...
post #3 of 50
Quote:
Originally Posted by AppleInsider View Post

Microsoft CEO Steve Ballmer saw his pay docked this year as a result of the disappointing performance of the company's Windows Division over the past year.

The Microsoft head received $1.26 million in compensation for fiscal 2013, with $697,500 of that in base salary and $550,000 in bonuses. Ballmer's "incentive plan award" for 2013, which is calculated by the Microsoft board, was only 79 percent of the total he could have gotten, while in 2012, Cnet notes, the Microsoft chief received 91 percent of his eligible incentive award. .

Wow. I wish I could get 79-91% of my maximum bonus for putting out crap like Surface RT.
Edited by jragosta - 10/5/13 at 6:05pm
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post #4 of 50
Quote:
Originally Posted by Bardo View Post

"the Committee and Board believe Mr. Ballmer is underpaid for his role and performance." - Blimey! Talk about deluded...

MS has been profitable every quarter except one for a large write off. I'm not sure what he did to make it better and what he didn't do to make it worse, but as you can see from my wording here I'm clearly not objective on the subject of Balmer as an executive.

Quote:
Originally Posted by jragosta View Post

Wow. I wish I could get 79-91% of my maximum bonus for putting out crap like Surface RT.

Right?!
post #5 of 50
Quote:
Originally Posted by akqies View Post

MS has been profitable every quarter except one for a large write off. I'm not sure what he did to make it better and what he didn't do to make it worse, but as you can see from my wording here I'm clearly not objective on the subject of Balmer as an executive.
Right?!

At that level, 'profitable every quarter' is not sufficient for a performance evaluation. If you do nothing at all, a company like MS would continue to be profitable for a long, long time.

Evaluation at that level is incremental - are profits increasing? Are they entering new markets? Are they doing better this year than last year? And, by all means, did avoid a massive write off for disastrous product launches?

The board messed up if he made that high a percentage of his maximum.
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post #6 of 50

Ballmer's bonus is just a 'rounding error'; he's worth over $18 billion! It's his pride that will be hurt. 

 

He and Gates between them could probably buy a controlling interest back in MS … and fire the Board.

 

They all deserve each other and oblivion for foisting garbage Windows and garbage Office and over 1 MILLION viruses (Symantec) on an innocent public.

post #7 of 50
Think of the bonus Ballmer is going to get by selling virtual Surface RT 2 systems to Delta.
post #8 of 50
Quote:
Originally Posted by enzos View Post
 

Ballmer's bonus is just a 'rounding error'; he's worth over $18 billion! It's his pride that will be hurt. 

 

He and Gates between them could probably buy a controlling interest back in MS … and fire the Board.

 

They all deserve each other and oblivion for foisting garbage Windows and garbage Office and over 1 MILLION viruses (Symantec) on an innocent public.

 

I know you THINK Ballmer and Gates could buy controlling interest, but they can't.  Between the two, they hardly have enough liquid cash to buy that much stock.  All of their wealth is tied up in stocks, etc, which they can't dump at market value, plus they would have a nice tax bill afterwards.

post #9 of 50
Quote:
Originally Posted by akqies View Post

MS has been profitable every quarter except one for a large write off. I'm not sure what he did to make it better and what he didn't do to make it worse, but as you can see from my wording here I'm clearly not objective on the subject of Balmer as an executive.
Right?!

Profitable in all the wrong areas. Still living off the Windows/Office cow in this day and age is unacceptable.

Making a profit, yet they're nowhere in mobile. You can make a profit selling rubber dogshit and still be doing all the wrong things vis-a-vis the competition. MS completely shit the bed in mobile, and their core Win/PC biz is being slowly phased out. This is where all the profit-from-the-wrong-things has brought them: a gradual slide into irrelevance, amid leaner and meaner competition.
post #10 of 50
He took home $1.26 million for sucking at his job and at life for 12 more months. “Developers, developers, developers…”
post #11 of 50
Yeah, love that report. The problem isn't "The CEO presided over creating a number of products that are undesirable", it's "Consumers are too stupid to buy what we are selling".
post #12 of 50
His doom was back in 2001, when Jobs 2.0 revealed the iPod. He played his cards right but apple had pocket Aces. He can only do so much, he wasn't Steve Jobs. I feel for him, cus Gates wouldn't have done any better.
post #13 of 50
I'm trying to equate the $900 mill write off with the $1.26 mill payout and the word 'underpaid'. That's a pretty big screw up all round.
post #14 of 50
Quote:
Originally Posted by virtua View Post

I'm trying to equate the $900 mill write off with the $1.26 mill payout and the word 'underpaid'. That's a pretty big screw up all round.

They really like how Surface 1 totally failed, but he is still willing to double-down and make the Surface 2.

post #15 of 50

"Ballmer shocked the tech world some weeks ago by announcing that he will leave Microsoft within the next year..."

 

Shouldn't that be "The tech world was shocked that the Microsoft board finally showed Ballmer the door after years of tolerating his complete denial of, and inability to lead in, the so-called 'post-PC' world."

post #16 of 50
Poor Ballmer... less money for coke and small boys.
post #17 of 50
Quote:
"...the Committee and Board believe Mr. Ballmer is underpaid for his role and performance."

 

post #18 of 50
Whatever he's making after the pay "cut" it's still wayyyyyyyy too much.

In a world where performance=salary this guy would owe MS millions.
post #19 of 50

Folks, I understand that this is an Apple web site and that it is 'cool' to draw down the competition, but we're living in an alternate reality if we truly believe that Microsoft is not still a VERY profitable company capable of making people very rich.  We can pretend Windows and Office are antiquated technologies, but simply saying it does not make it true.  I love Apple, Windows Surface RT was a flop, and Ballmer is a buffoon but this thread is quite ridiculous, especially the poster that alludes to Ballmer apparently having an addiction to illegal drugs and 'small boys'.

 

This quote is written by somebody who simply doesn't understand, well, a bunch of simple business measurements:

Making a profit, yet they're nowhere in mobile. You can make a profit selling rubber dogshit and still be doing all the wrong things vis-a-vis the competition. MS completely shit the bed in mobile, and their core Win/PC biz is being slowly phased out. This is where all the profit-from-the-wrong-things has brought them: a gradual slide into irrelevance, amid leaner and meaner competition.

 

In this day and age (and for many years before) a profit is a profit.  Period.  Apple makes profits, too.  Why is making a profit selling Rubber Dogshit "wrong" if rubber dogshit is what you make?  In the world of business, it doesn't matter how make a profit...it simply is important that you do so.  To somehow pretend that Microsoft's profit isn't as good as Apple's profit or to cheapen it by pretending that it was made selling products that are undesirable is to woefully and VERY apparently misunderstand the marketplace.  Face facts:  Not only is Microsoft making a profit on Windows and Office...they are sustaining a massive company with the two.

 

I'm a bit baffled as to how anyone who understands business, investor expectations and simple math can pretend that a profit based on products like Windows and Office are somehow invalidated by another companies successes or status in a specific market segment (such as mobile).

post #20 of 50
and he's still there with a delayed "retirement date." It's time to scrub the top level and Board of the old school (and yes, that includes Gates). This has been a rolling train wreck for many years. MS? The next Kodak, Xerox?
post #21 of 50
Quote:
Originally Posted by VonBrick View Post

Folks, I understand that this is an Apple web site and that it is 'cool' to draw down the competition, but we're living in an alternate reality if we truly believe that Microsoft is not still a VERY profitable company capable of making people very rich.  We can pretend Windows and Office are antiquated technologies, but simply saying it does not make it true.  I love Apple, Windows Surface RT was a flop, and Ballmer is a buffoon but this thread is quite ridiculous, especially the poster that alludes to Ballmer apparently having an addiction to illegal drugs and 'small boys'.

This quote is written by somebody who simply doesn't understand, well, a bunch of simple business measurements:
Making a profit, yet they're nowhere in mobile. You can make a profit selling rubber dogshit and still be doing all the wrong things vis-a-vis the competition. MS completely shit the bed in mobile, and their core Win/PC biz is being slowly phased out. This is where all the profit-from-the-wrong-things has brought them: a gradual slide into irrelevance, amid leaner and meaner competition.

In this day and age (and for many years before) a profit is a profit.  Period.  Apple makes profits, too.  Why is making a profit selling Rubber Dogshit "wrong" if rubber dogshit is what you make?  In the world of business, it doesn't matter how make a profit...it simply is important that you do so.  To somehow pretend that Microsoft's profit isn't as good as Apple's profit or to cheapen it by pretending that it was made selling products that are undesirable is to woefully and VERY apparently misunderstand the marketplace.  Face facts:  Not only is Microsoft making a profit on Windows and Office...they are sustaining a massive company with the two.

I'm a bit baffled as to how anyone who understands business, investor expectations and simple math can pretend that a profit based on products like Windows and Office are somehow invalidated by another companies successes or status in a specific market segment (such as mobile).

I mean, we're venturing on the edge of ridiculous here, folks.  Can we TRY to step it up a bit with a little reasoning and common sense and not become just another site full of fanbois blind to the potential of anyone who is not Apple?

Microsoft's profit isn't as good as Apple's for two reasons: first, PCs are a dying industry. Second, Balmer had nothing to do with those profits; he merely inherited them from Gates.

Yes, currently Microsoft is turning a profit, but at the same time Balmer as CEO has cost them billions more profit.
post #22 of 50

Don't forget that the board of directors represents a potential pool of future CEOs so any decision they make regarding the current CEO's compensation could have a direct effect on their personal financial future. 

post #23 of 50
I'ts unbelievable how Microsoft still treats their customers. I wanted to install my free media center license on my surface pro (I'm one of the few that has one...). In the end I had to completely reinstall the device because the key was marked invalid, the upgrade to media center was done anyway, window was no longer activated, the original key is only hidden in the uefi firmware and there isn't any way to downgrade back to pro anyway.
Horrible! To really appreciate apple, you really need to use a microsoft product from time to time.
post #24 of 50
If there is any justice, MS complimented Apple's iPod with Zune, Apple's iTunes with MarketPlace, Apple's iPhone with first laughter, then faux burial, then Windows Mobile 8, Apple's iPad with Surface RT and Pro... NOW MS should compliment Ballmer with Apple's late CEO Steve Job's salary... One Dollar!

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post #25 of 50
Quote:
Originally Posted by iaeen View Post


Microsoft's profit isn't as good as Apple's for two reasons: first, PCs are a dying industry. Second, Balmer had nothing to do with those profits; he merely inherited them from Gates.

Yes, currently Microsoft is turning a profit, but at the same time Balmer as CEO has cost them billions more profit.

 

 

And again, urging us to use common sense and reliable information here, with what dataset do you have to prove that Steve Ballmer remained CEO of Microsoft at the expense of A) how many more billions of profit to shareholders and employees and B) cite which specific actions would absolutely have generated MORE money.  Please cite specific information to prove your comments are based in fact and not just rhetoric.  Extra credit if you offer data proving that Steve Ballmer generated zero dollars for Microsoft during his tenure post-Gates as you claim while somehow explaining the following:  How can a CEO can remain on the job for more than a decade, have one sour quarter among more than a decade of profitability and yet still be blamed for zero growth.

 

?????  [SIGH]


Edited by VonBrick - 10/6/13 at 8:01am
post #26 of 50
Microsoft's Board of Directors has no clothes on %u2026 and no one is willing to admit it.

A great salesman ought to stay as the sales manager.

Microsoft should have found a product visionary to head MS so they could lead rather than follow the industry slowly.

MS has lost a dozen years under lackluster leaders.
post #27 of 50

He should be canned. He is an embarrassment to his company and the laughing stock of the tech world.  His salary should be 0.

post #28 of 50
Quote:
Originally Posted by BoC View Post

Microsoft's Board of Directors has no clothes on %u2026 and no one is willing to admit it.

A great salesman ought to stay as the sales manager.

Microsoft should have found a product visionary to head MS so they could lead rather than follow the industry slowly.

MS has lost a dozen years under lackluster leaders.

 

This!

post #29 of 50
Quote:
Originally Posted by VonBrick View Post
 

 

 

And again, urging us to use common sense and reliable information here, with what dataset do you have to prove that Steve Ballmer remained CEO of Microsoft at the expense of A) how many more billions of profit to shareholders and employees and B) cite which specific actions would absolutely have generated MORE money.  Please cite specific information to prove your comments are based in fact and not just rhetoric.  Extra credit if you offer data proving that Steve Ballmer generated zero dollars for Microsoft during his tenure post-Gates as you claim while somehow explaining the following:  How can a CEO can remain on the job for more than a decade, have one sour quarter among more than a decade of profitability and yet still be blamed for zero growth.

 

?????  [SIGH]

Well, we can easily point to the failed Surface launch in which they had to write down $900 million in addition to having spent about $1 billion in marketing expenses for it. Asking for concrete proof is ridiculous, as none of us has a time machine. But it doesn't take a genius to see that Ballmer has failed at everything that didn't involve maintaining the existing cash cows. Even those are being undermined now.

post #30 of 50

Wonder how he will pay his mortgage now? It's a shame.

post #31 of 50
Quote:
Originally Posted by VonBrick View Post
 

 

 

And again, urging us to use common sense and reliable information here, with what dataset do you have to prove that Steve Ballmer remained CEO of Microsoft at the expense of A) how many more billions of profit to shareholders and employees and B) cite which specific actions would absolutely have generated MORE money.  Please cite specific information to prove your comments are based in fact and not just rhetoric.  Extra credit if you offer data proving that Steve Ballmer generated zero dollars for Microsoft during his tenure post-Gates as you claim while somehow explaining the following:  How can a CEO can remain on the job for more than a decade, have one sour quarter among more than a decade of profitability and yet still be blamed for zero growth.

 

?????  [SIGH]

 

How can a CEO stay on the job after a decade of poor performance?  Support from the founder.

 

What evidence is there that Ballmer was a poor CEO?  Take a look at the 10-year stock performance of MSFT, AAPL, GOOG, ORCL, IBM.  Which one of those 5 went nowhere in 10 years?  If all your competitors in various sectors managed impressive returns and your company did not, perhaps the leadership is to blame?

 

Ballmer managed to keep MSFT's de facto monopoly profits coming in, but does anyone think MSFT is in a stronger position now than it was 10 years ago?

 

The standard for a Fortune 500 CEO is not "did he prevent the company from going bankrupt?"  Is the standard for an NFL coach, did he win some game last season?  Do you measure your own success over 10 years by asking "am I making as much money as I did 10 years ago?"  Of course not.  There is a reason the MSFT stock price shot up the day Ballmers' departure was announced.

 

You don't have to be an Apple fan to see that MSFT could have done much, much better with someone else in the big chair.  Of course long-time Apple fans can be excused a sense of schadenfreude witnessing the decade of MSFT/Ballmer blundering.

post #32 of 50
Quote:
Originally Posted by iaeen View Post

Microsoft's profit isn't as good as Apple's for two reasons: first, PCs are a dying industry..

Yes, but Apple was smart enough to realize that and move into new markets. Microsoft tried to move into new markets (years after Apple showed them the way) and then failed. So they had two failures - both strategy and execution.
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post #33 of 50
Xbox lost 8 billion $ what can I say it's still being sold wtf?
post #34 of 50
Quote:
Originally Posted by jragosta View Post

Yes, but Apple was smart enough to realize that and move into new markets. Microsoft tried to move into new markets (years after Apple showed them the way) and then failed. So they had two failures - both strategy and execution.

That was exactly my point.
post #35 of 50

Ballmer owns about 408 million shares of Microsoft. Microsoft pays a 0.23 cent a share quarterly dividend. Unless my math is off, Ballmer is making about 11 million dollars a quarter in dividends. About 44 million a year in dividend. The fact he draws a salary when he was given the shares and pushed the dividend is crazy. 

 

 

post #36 of 50
Quote:
Originally Posted by malax View Post

"
Ballmer shocked the tech world some weeks ago by announcing that he 
will leave Microsoft
 within the next year..."
Shouldn't that be "The tech world was shocked that the Microsoft board finally showed Ballmer the door after years of tolerating his complete denial of, and inability to lead in, the so-called 'post-PC' world."

Yes, but it is easier to say 'Ballmer shocked the tech world some weeks ago by announcing that he will leave Microsoft'.
post #37 of 50
Quote:
Originally Posted by sirdir View Post

I'ts unbelievable how Microsoft still treats their customers. I wanted to install my free media center license on my surface pro (I'm one of the few that has one...). In the end I had to completely reinstall the device because the key was marked invalid, the upgrade to media center was done anyway, window was no longer activated, the original key is only hidden in the uefi firmware and there isn't any way to downgrade back to pro anyway.
Horrible! To really appreciate apple, you really need to use a microsoft product from time to time.

We have a problem here in my company as well, though (thankfully) nothing Surface related.

A couple of us have MBPs with Bootcamp and Windows 7 installed, since our main work is with Visual Studio. Now, with Windows 8, we get reamed if we want to upgrade. The Windows 8 versions available for purchase are only for upgrades. We cannot buy a new install version.

So, while we can possibly upgrade, we cannot install Windows 8 on any new Macs and cannot install Windows 7 either, since they stopped selling licences for it.

When we called up MS Support (an oxymoron), they said something to the effect of us having to go through a lot of hoops, pay a lot of money and then get a DVD-R of Windows 8, which would be what they give OEMs.

A real pain. It looks like the next few guys will not be getting MBPs or MacMinis and will have to settle for Dell.
post #38 of 50
Quote:
Originally Posted by BestKeptSecret View Post

A couple of us have MBPs with Bootcamp and Windows 7 installed, since our main work is with Visual Studio.

I take it you guys need the full power of native, and vitualization is not an option? Otherwise W7 is still available.
Quote:
Now, with Windows 8, we get reamed if we want to upgrade. The Windows 8 versions available for purchase are only for upgrades. We cannot buy a new install version.

That is the weirdest thing I heard I've heard. Coming from MS, kinda understandable.
Quote:
When we called up MS Support (an oxymoron)

LOL!
Quote:
and will have to settle for Dell.

Ah, that isn't that bad, really. You'd still be running Windows, just like in Bootcamp. Though Windows does run faster on a Mac than on a Wintel box, but whatever, it's only work, right.
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post #39 of 50
Quote:
Originally Posted by VonBrick View Post

I'm a bit baffled as to how anyone who understands business, investor expectations and simple math can pretend that a profit based on products like Windows and Office are somehow invalidated by another companies successes or status in a specific market segment (such as mobile).

Because that other company's mobile business profits alone are larger than all of Microsoft's businesses PUT TOGETHER.

There's your "simple math".

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post #40 of 50
Quote:
Originally Posted by PhilBoogie View Post

Ah, that isn't that bad, really. You'd still be running Windows, just like in Bootcamp. Though Windows does run faster on a Mac than on a Wintel box, but whatever, it's only work, right.

Sure, but for the 'home' part, the guys with Dell machines are still stuck with Windows. With an MBP, all my personal work is on OS X.
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