Microsoft CEO Ballmer receives $1.35M in 2008

Microsoft also said it would change the way it calculates bonuses and stock awards in fiscal 2009 and beyond.

Ballmer's compensation for the year ended June 30 amounts to a 5.6 percent raise. According to a regulatory filing Monday, he received $640,883 in salary and a $700,000 bonus, or 109 percent of his salary. Ballmer's bonus target was set at 100 percent of his salary and he was eligible for up to 200 percent.

Some technology companies spend millions on executive security, travel and other perquisites; by comparison, Microsoft looks very frugal. The software maker contributed $6,900 in matches to Ballmer's 401K retirement plan and gave him about $3,100 worth of life insurance, disability insurance and athletic club membership fees.

The CEO, who owns about 4.5 percent of Microsoft's shares, received no equity compensation. He didn't exercise any stock options or vest any stock awards during the year.

Ballmer's raise wasn't nearly as dramatic as company's own performance in the year. Microsoft's profit ballooned 26 percent to $17.7 billion.

In the filing, the company said Ballmer's package is not calculated using a formula. Rather, the board's compensation committee considers his past earnings, his status as a significant shareholder, the compensation given to other Microsoft executives and an evaluation of Ballmer's performance in the fiscal year that just ended.

Because Ballmer doesn't receive stock or options, his $1.35 million package is slim compared to those of CEOs at other companies of similar size. Oracle Corp.'s Larry Ellison, for example, received a pay package valued at $84.6 million for fiscal 2008, a 38 percent raise over the previous year.

The Associated Press' calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

For the current 2009 fiscal year, Microsoft said it will revamp the way cash bonuses and equity incentive compensation are calculated for its top 10 or so executives.