Microsoft Corp paid its chief executive Steve Ballmer 5.5 percent less for the last fiscal year as the world's biggest software company suffered its first ever drop in annual sales.

Ballmer, CEO since 2000, earned a total of $1,276,627 for fiscal year 2009, which ended June 30, according to a filing with securities regulators on Tuesday. That is slightly below the previous fiscal year's total of $1,350,834.

Ballmer's salary of $665,833 was up slightly from last year, but his bonus was slashed by $100,000 to $600,000. At his own request, Ballmer receives no compensation in the form of Microsoft shares.

Microsoft lowered compensation for most of its highest-level executives in the last fiscal year. It said in January that it had frozen salaries for fiscal 2010 which started July 1, in response to the difficult economic climate.

The company suffered its first-ever drop in annual revenue in fiscal 2009 and operating profit fell 9 percent to $20.4 billion. Its shares fell 13.6 percent over the 12-month period.

Even in good times, Microsoft has never made a splash with huge pay packages, although many of its employees and executives have become millionaires by owning Microsoft shares.

Ballmer himself owns about 408 million Microsoft shares, according to Tuesday's filing, worth more than $10 billion.

(Reporting by Bill Rigby; editing by Carol Bishopric)

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