Microsoft shareholders to determine Ballmer and co.’s pay packets
Microsoft is one of the largest companies in the world, and consequently it needs good people at the top running it. But do good people need overly extravagant pay packets – especially in the financial conditions the world now finds itself in? The U.S. government doesn’t think so, and Microsoft has acted before any official legislation is carried through.
Isn’t it always the case that during a recession or times of economic turmoil it’s always the ordinary man and woman on the street who suffers first and suffers the most. The people who have their wages frozen are the lucky ones, with other either having to face pay cuts or unemployment.
Meanwhile, the executives who run the companies manage to muddle through with big bonuses, usually handed out for making the tough decisions which saved the company a bundle of money but saw people turfed out of their jobs.
With the current situation in America, where the recession has hit the hardest and banks and lenders have been bailed out by the government and consequently the taxpayers, there is pressure for businesses to get their houses in order. Which means an end to the huge bonuses and excessive pay deals for the upper echelons of the board room that seem to be the norm these days.
The U.S. House of Representatives approved a bill earlier this year which would give shareholders the right to vote on executive pay on an annual basis. But it isn’t law yet. However, according to BBC News, Microsoft has beaten the lawmakers to it by bringing a similar scheme into effect.
At the 2009 annual general meeting on Nov. 19, shareholders will vote on the pay its board members should receive. The same will happen every three years, and although the result of the vote won’t be binding, the views of the shareholders will be listened to and taken into account.
Brad Smith, Microsoft general counsel, said, “Given the interest in executive pay, we think it makes sense to encourage more dialog with our shareholders on our compensation approach.”
Chief Executive Steve Ballmer was paid $665,833 for the 2009 fiscal year, with a cash incentive yet to be set. Last year saw him bag $700,000. However, Ballmer owns around 408 million Microsoft shares worth more than $10 billion, so I doubt he’s too concerned with whether the shareholders see fit to award him a big bonus.
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