NEW YORK (Reuters) - Microsoft (MSFT.O)
has approved a proposal to allow shareholders to vote on its executives'
compensation, as U.S. corporations' pay policies come under scrutiny in the
wake of the financial crisis.
Shareholders will be allowed to vote every three years on the pay of
Microsoft executives, starting with the annual meeting on November 19, the
world's biggest software company said in a regulatory filing on Friday.
The votes will not be binding, but Microsoft said that, in the result of
a "significant negative" vote, it would "consult directly with shareholders
to better understand the concerns that influenced the vote."
The U.S. Congress has been discussing legislation on so- called "say on
pay" measures to give shareholders more involvement in executive pay in the
wake of scandals over massive bonuses paid to failing firms in the past few
years, but so far none has been made law.
Microsoft said it adopted the vote after discussions with shareholders,
including Walden Asset Management, Calvert Investments and the United
Brotherhood of Carpenters, which had submitted similar proposals for
The U.S. House of Representatives approved a bill to give shareholders
annual nonbinding votes on executive pay earlier this summer, but
legislation has since stalled.
Wall Street banks have attracted the most scrutiny of their pay packages,
but Microsoft said it wanted to be transparent in its governance to foster
"Given the interest in executive pay, we think it makes sense to
encourage more dialogue with our shareholders on our compensation approach,"
said Brad Smith, Microsoft general counsel, in a statement.
The company is not known for its huge pay packages, although many of its
employees and executives have become millionaires through owning Microsoft
Chief Executive Steve Ballmer was paid only $665,833 (409,021 pounds) in
salary for fiscal 2009, which ended in June, according to Friday's filing,
only slightly up from the previous year's $640,833. His cash incentive
payment has yet to be established. Last year it was $700,000.
Ballmer, who owns about 408 million Microsoft shares worth more than $10
billion, has requested no equity compensation from the company.
The 2009 fiscal year was tough for Microsoft, as it was for most U.S.
companies. It had its first-ever drop in annual revenue and operating profit
fell 9 percent to $20.4 billion. Its shares fell 13.6 percent over the
Because of the uncertain economy, Microsoft said in January that all
employees and executives would not receive merit-based salary increases for
fiscal year 2010.
The company left its quarterly dividend at 13 cents per share.
(Reporting by Bill Rigby; editing by Richard Chang)