A family of Microsoft word processing software products for creating web, email, and print documents.
Sorry for reviving an old thread but I found a fix after a lot of searching and want to save someone trouble:
I had the same problem, tried everything I could find but nothing worked until I found this: Option 3 is a Regestry Edit, mine was set to "b" instead of "0".
METHOD 3: Using Registry Editor
If above mentioned 2 methods don't work for you, here is a Registry tweak to fix the issue:
1. Type regedit in RUN dialog box and press Enter. It'll open Registry Editor.
2. Now go to following key:
for Office 2007: HKEY_CURRENT_USER\Software\Microsoft\Office\12.0\Word\Options
for Office 2010: HKEY_CURRENT_USER\Software\Microsoft\Office\14.0\Word\Options
for Office 2013: HKEY_CURRENT_USER\Software\Microsoft\Office\15.0\Word\Options
3. In right-side pane, look for a DWORD CompatMode. If you find it, delete it. If it doesn't exist, create a new DWORD and set its name to CompatMode and set its value to 0

4. Close Registry Editor and restart Word. It should solve the problem.
Source: http://www.askvg.com/fix-microsoft-word-always-shows-compatibility-mode-text-in-titlebar/