This excerpt taken from the MSFT DEF 14A filed Sep 21, 2007.
Compensation of the Chief Executive Officer
Mr. Ballmer has for many years been a significant shareholder of Microsoft. Because his interests are already closely aligned with shareholders interests, the Compensation Committee and Mr. Ballmer agree that he should not receive equity compensation. His salary and total compensation are below competitive levels for the information technology industry and large market capitalization U.S. companies. The average chief executive officer salary and bonus for the peer group companies we use were $1.4 million in salary and $5.5 million in annual cash bonus and cash incentives. The average chief executive officer total compensation for the peer group companies we use was $13.9 million. Mr. Ballmer is eligible for an annual bonus of up to 120% of his salary based on a review of his performance against objectives for the year. As a leader of Microsoft, he focuses on building long-term success, and as a significant shareholder, his personal wealth is tied directly to sustained increases in our value. The Committee has indicated it believes that Mr. Ballmer is underpaid for his role and performance; however, the Committee has accepted his recommendation to continue with Microsofts historical practice for his total compensation opportunity.
There is no Company-sponsored retirement program for Mr. Ballmer other than our 401(k) program, and he receives no benefits or perquisites from us other than the general Company benefits described below. Mr. Ballmer does not have a change of control arrangement.
For fiscal year 2007, our Chairman, Mr. Gates, was not a named executive officer. He does not receive equity compensation and, as a result, his total compensation was substantially less than our three most highly compensated executive officers.