It's proxy season for a lot of companies, and that means we get to sneak a peek at their executive compensation packages. Today, we're looking at software mastodon Microsoft (NASDAQ:MSFT).

Starting at the top, CEO Steve Ballmer said "thanks, but no thanks" to stock-based compensation and went home with a paltry $1.28 million in salary and bonuses this year. That's slightly below last year's $1.35 million package, but Steve qualified for 90% of his potential bonuses. This stellar performance evaluation rests on key points like tight expense management and progress in areas like the online search market and the development of Windows 7.

Of course, Ballmer is no pauper. He owns more than $10 billion in Microsoft stock, so this million-and-change is just a drop in his very large bucket. That's almost always the case when you see altruistic announcements that Apple (NASDAQ:AAPL) CEO Steve Jobs or Google's (NASDAQ:GOOG) triumvirate of Sergei, Larry, and Eric got a $1 paycheck. It's great publicity, and these guys don't really need the money anyway.

Further down the payroll, the board didn't award 90% of the target bonuses to everybody. Have a look:

Executive

% of Target Bonus

Total Direct Compensation

Change From 2008

COO Kevin Turner

68%

$5.4 million

(37%)

CFO Chris Liddell

70%

$3.5 million

(26%)

Robert Bach, entertainment and devices

80%

$6.2 million

(25%)

Stephen Elop, Microsoft businesses

60%

$4.8 million

20%

You may think it strange to see the guy with the weakest performance rating score the only pay increase. But Mr. Elop joined Microsoft in January 2008, after departing the COO post at networking specialist Juniper Networks (NASDAQ:JNPR). All told, Elop actually received a 45% pay cut on his non-salary incentives on an annualized basis. Oh, but then he saw another $5.4 million in relocation assistance and tax gross-ups. Don't cry for Stephen Elop.

All told, Microsoft's board didn't exactly cut executive pay to the bone despite an uninspired year. Then again, what's a few million between friends when Microsoft has about $30 billion of cash equivalents in the bank? Unlike the underperformers of AIG (NYSE:AIG) and Abercrombie & Fitch (NYSE:ANF), Microsoft's leaders are guiding their company to profits and may actually deserve their generous pay packages.

What do you think? While Microsoft’s pay practices strike me as in line with performance, other may feel differently. Discuss in the comments below.

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Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.