Poor Windows Phone 7 sales cost Steve Ballmer his bonus

Microsoft chief executive Steve Ballmer has missed out on his full bonus entitlement for the second year running as the firm continues to struggle in the mobile computing market.

Ballmer is entitled to up to 200 per cent of his salary in bonuses, but received only 100 per cent for 2011, still a hefty $682,500, owing to the poor performance of Microsoft's smartphone platform and the failure to compete in the tablet arena.

"Lower than expected initial sales of Windows Phone 7; the two per cent decline in revenue for the Windows and Windows Live Division; the need for further progress in new form factors," the board said in a filing with the Securities and Exchange Commission.

Ballmer also failed to secure his bonus in 2010 after minimal progress in the mobile market, the board noting that the lack of any tablet products is holding the company back.

However, the board did say that Ballmer performed well in pushing the company forward in several key areas during 2011, including the successful launch of Office 365 and a number of key partnerships and acquisitions.

"Continued progress positioning the company as a leader in the cloud and cloud-based infrastructure; key partnerships with Facebook and Nokia; significant progress in development of the next generation of Windows; work toward the successful acquisition of Skype," the filing said.

The board also said it considers Ballmer to be "underpaid" for his position in relation to chief executives at peer technology firms, as he earns around $2m a year compared with around $15m for other technology leaders.

This is because Ballmer declines to take stock options as he already owns 3.95 per cent of Microsoft, worth around $14bn, and the board said that it will continue to honour this request.

Despite strong revenues during his tenure at Microsoft, Ballmer has frequently been criticised for failing to excite investors and stimulate the company's stagnating share price.