Ballmer Looking To Keep Microsoft Board Seat After Stepping Down As CEO

Steve Ballmer is leaving his post as Microsoft CEO but still wants to retain his seat on Microsoft's board of directors, according to Microsoft's annual proxy filing Thursday with the Securities and Exchange Commission.

Ballmer, who has held a seat on Microsoft's board of directors since taking over for Bill Gates as CEO in 2000, is one of Microsoft's nine board members seeking re-election at the company's annual meeting with shareholders, to be held Nov. 19 in Bellevue, Wash.

There are a couple of ways to look at this. If Microsoft's next CEO follows the course Ballmer laid out in June in his "One Microsoft" corporate re-organization around devices and services, it would make sense for Ballmer to stick around to see it through.

[Related: Microsoft Offers Board Seat To Activist Investment Firm ValueAct Capital ]

Dave Sobel, a Fairfax, Va.-based Microsoft MVP (Most Valuable Professional) partner, said it's only logical that Microsoft would want Ballmer to oversee the re-org to its full implementation.

"You do always want the input of previous management when they depart on favorable terms, and I see Ballmer moving in much the same way," Sobel said in an email. "I think it's natural for him to stay engaged with the organization, and I do expect he has a place."

On the other hand, some investors are reportedly pushing for radical change at Microsoft, so they might not be thrilled with the idea of Ballmer retaining his board seat and keeping the company on its current course.

While Microsoft's enterprise business has thrived under Ballmer's watch, its mobile business and search businesses have not done so well, even after heavy and sustained investments in both.

Last month, Microsoft said it would grant a board seat to ValueAct Capital, a San Francisco-based activist investment firm ValueAct Capital, and some analysts took this as a compromise to avoid a proxy fight.

In what could be further evidence of shareholder unrest, Reuters earlier this week reported that three of Microsoft's top investors are pushing for board Chairman Bill Gates to relinquish his post.

NEXT: Ballmer's Bonus Takes A Hit Due To Surface

Microsoft thought it had an answer to the iPad with Surface tablets, but that gambit hasn't worked out either. Microsoft last month took a $900 million charge on unsold Surface RT inventory, which combined with the tepid market reception to Windows 8, ended up putting a dent in Ballmer's 2013 bonus.

Ballmer made $1.26 million in Microsoft's fiscal 2013 year, including a salary of $697,500 and a bonus of $550,000, which amounted to 79 percent of his target award, according to the proxy filing.

"While the launch of Windows 8 in October 2012 resulted in over 100 million licenses sold, the challenging PC market coupled with the significant product launch costs for Windows 8 and Surface resulted in an 18% decline in Windows Division operating income," Microsoft said in the proxy filing. "Slower than anticipated sales of Surface RT devices and the decision to reduce prices to accelerate sales resulted in a $900 million inventory charge."

Microsoft CFO Amy Hood and Kurt Delbene, the former president of Microsoft's Office division who left in the June re-organization, both received 100 percent of their bonuses. Satya Nadella, head of Microsoft's $19 billion Server and Tools unit, received a $1.58 million bonus that was 105 percent of his target.

Microsoft COO Kevin Turner was the company's highest paid executive for the fourth consecutive year, with a total compensation package of $10.38 million -- including a $2.1 million bonus that represented 100 percent of his target.

PUBLISHED Oct. 4, 2013