Reports about Microsoft's annual proxy statement focus on Steve Ballmer's paltry 2 percent pay raise. The big news is with the other Steve

Microsoft's annual proxy statement arrived on Monday, and most of it's a snooze. It's largely forgettable, repeating numbers we've seen in the annual report -- until you get to the parts about shareholdings and salaries for Microsoft's biggest wigs. It gets even more interesting when you compare this year's report with last year's (DOC).

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According to this year's proxy statement, Steve Ballmer got a 2 percent raise, to $2,047,000 for fiscal 2011. At that rate, "the Board believes Mr. Ballmer is underpaid for his role and performance."

Lest you're worried that Ballmer might appear on a street corner near you, hat in hand and begging for nickles, take a look at his stock holdings. One year ago, he held 408 million shares. In the past year, he's sold 18 percent of his holdings and now owns just 333 million shares. Last November, I wrote about his pending stock sales and how they might presage a long-term departure plan. It looks like Ballmer sold all of the 75 million shares he reported, for about $2 billion.

Bottom line: $2 million in salary, $2 billion in stock sales. Not bad for a year's work.

The really interesting story, though, isn't with Steve Ballmer. It's with Steve Sinofsky.

Last year, Sinofsky didn't make the list of named shareholders. Microsoft is only required to report the stock holdings of directors, the CEO, CFO, and the three highest-paid executive officers. Last year, Sinofsky didn't make enough money -- he isn't a director -- so we have no way of knowing how many shares of Microsoft stock he held.

This year Sinofsky's compensation put him among the top three executive officers: almost $650,000 in compensation, a $1.3 million bonus, and $5.3 million in stock options. Since he's now one of the top three, Microsoft has to report his stock holdings.

Turns out Sinofsky is the fourth-largest reported shareholder, behind Bill Gates, Ballmer, and venture capitalist David Marquardt. Sinofsky has "beneficial ownership" of more than 1.1 million shares of Microsoft, including more than 600,000 vested shares that apparently haven't been exercised yet.

That doesn't make Sinofsky the fourth-largest Microsoft shareholder -- not by a long shot. Microsoft is required to report the total number of shares held by all executive offices and directors, and that group of 17 people holds a whopping 879 million shares.

Still, 1.1 million shares makes a pretty nice nest egg, eh? Especially considering Sinofsky isn't yet a member of the board.