Sun Microsystems Inc. Chief Executive Jonathan Schwartz received an $11.1 million pay package in the server and software maker’s most recent fiscal year.

The amount represents a 44 percent bump over the previous year’s $7.7 million in compensation, a reward for Sun’s recent profitability streak, but was far short of what Schwartz could have garnered.

A serious downturn in the second half of the 2008 fiscal year, due to tougher competition from Hewlett-Packard Co. and IBM Corp. and Santa Clara-based Sun’s heavy reliance on U.S. businesses and financial services firms, cut deeply into Sun’s results and has held down its shares.

Sun’s sales have suffered because of the downturn, disappointing Wall Street and causing Schwartz to only get about half of the performance-based cash bonus for which he was eligible.

Schwartz, whose $1 million annual salary was unchanged from 2007 and remains unchanged for this year, received a $1.04 million bonus, short of the $2 million target because of the company’s poor performance in the third and fourth fiscal quarters.

Sun swung to a loss in the third quarter and its profit plunged 73 percent in the fourth quarter. Sun, the world’s fourth-largest server maker, also forecast a decline in sales for the first quarter and indicated it likely wouldn’t turn a profit, surprising Wall Street analysts.

Schwartz’s pay package also included $52,000 for a chauffeur and $6,300 in matching 401(k) contributions.

For the 2008 fiscal year which ended June 30, and in which Sun earned $403 million on $13.9 billion in sales, Schwartz also missed out on millions of dollars in performance-based restricted stock awards because of the company’s performance.

Schwartz was awarded 66,000 shares of performance-based restricted stock, worth $4.4 million when they were granted, but only a third of the target amount that Sun had set for him.

Sun said in its proxy filing Wednesday that because all of the performance targets weren’t met, 67 percent of the target amount of shares of restricted stock were forfeited.

Still, Schwartz received options on 500,000 shares of Sun’s stock, an award worth $4.6 million on the date it was granted. It vests over a total of five years.

Schwartz has said that the ailing U.S. economy played a big part in Sun’s downturn in the second half of the year, but analysts said the company is also being squeezed at both the high end and low end of servers because of greater competition from IBM and HP.

The low end in particular, referring to servers based on PC chips built around the so-called x86 design, is being pressured because of price cutting.

Sun’s worldwide server market share fell more than 7 percent to 11.2 percent in the most recent quarter, as measured by market research firm IDC. Meanwhile, IBM, the biggest server maker, saw its market share grow nearly 14 percent during the same period.

Still, Schwartz was rewarded for guiding Sun to six profitable quarters out of the last seven periods. Before that, Sun had racked up more than $5 billion in losses after the dot-com collapse. But some analysts are concerned the turnaround is unsustainable because a lot of the improvement has come from job-cutting _ Sun has cut 6,500 jobs over the past two years.

Some investors have said Sun’s stock might be a good buy now because it’s fallen steadily since the company’s 1-for-4 reverse stock split in November, a move that Wall Street saw as a sign Sun couldn’t meaningfully improve its share price without the essentially cosmetic maneuver.

The stock traded above $20 when the split happened, and is now around its lowest levels since. Sun shares were trading up 22 cents, or 2.8 percent, at $7.98 Wednesday afternoon.

The Associated Press calculations of total pay include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.