Microsoft CEO Satya Nadella has been awarded a staggering 63% increase in his pay package, bringing his total compensation to $79.1 million. This notable increase, as disclosed in the company’s recent regulatory filings, has raised eyebrows among employees and industry analysts alike, especially given the challenges the company faced in the past year.
Majority of Pay in Stock Shares
The majority of Nadella’s compensation is tied to Microsoft shares, with approximately 90% of his total pay in stock. This reflects the company’s emphasis on aligning executive compensation with shareholder interests. Interestingly, the package could have been $5 million higher if Nadella hadn’t requested a personal pay cut in response to the company’s recent cybersecurity issues, which he deemed as “personal accountability.”
Cybersecurity Criticism and Layoffs
This pay increase comes on the heels of a scathing report from the U.S. government’s Cyber Safety Review Board, which criticized Microsoft’s security practices. The report highlighted a significant breach attributed to a Chinese hacking group that compromised the email accounts of 25 organizations, including government agencies. Microsoft President Brad Smith acknowledged these failures before Congress, stating, “we acknowledge that we can and must do better.”
The company’s cybersecurity woes have been compounded by a series of layoffs throughout the year. Microsoft has laid off over 2,500 employees since acquiring Activision Blizzard for $69 billion in 2023. Two major rounds of layoffs saw 1,900 jobs eliminated in January, followed by 650 more in September, alongside the closure of four gaming studios.
Increasing Compensation Across the Board
Nadella’s substantial pay increase is not an isolated incident; other executives have also seen their compensation rise. Chief Financial Officer Amy Hood received a 30% increase to $25.8 million, while President Brad Smith’s pay rose by 29% to $23.4 million. As Microsoft continues to navigate its financial and operational challenges, the significant compensation packages for its top executives present a stark contrast to the experiences of many employees.
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