This is something I really respect out of Microsoft. This means that he makes, at most, maybe $2-3 million/yr (about $1.35 million). The company itself makes about $16 billion in net income. He deserves the pay, even though he is a scary, scary man. There's companies that are making a negative net income that are paying their CEOs more.
He does probably get a lot of income from Microsoft stocks, but then again, with stock dividends, that extra income is directly tied to how the company does. More companies should do this with their CEOs.