The US firm said shareholders would be allowed to vote on the issue every three years, starting at the 2009 annual general meeting on 19 November.

Microsoft's move comes amid growing pressure in the US for firms to cut down on excessive pay deals for bosses.

Politicians in Washington are looking at legislating over the issue.

Microsoft said that while it would not be bound by any shareholder vote, if there was a significantly "negative" call, it would "consult directly with shareholders to better understand the concerns that influenced the vote."

The US House of Representatives approved a bill in the summer to give shareholders annual non-binding votes on executive pay, but the legislation has stalled since then.

While the focus of politicians' ire is the banking sector, concern regarding excessive pay has spread to firms in other sectors of the economy.

"Given the interest in executive pay, we think it makes sense to encourage more dialogue with our shareholders on our compensation approach," said Brad Smith, Microsoft general counsel.

Microsoft is not known for its huge pay packets, but its executives have become millionaires through owning shares in the firm.

While the basic pay of chief executive Steve Ballmer is $665,833 (£409,000) this year, he owns Microsoft shares worth more than $10bn.

Source: BBC