Satya Nadella's Salary Increase and Pay Cut Explained

In the fiscal year 2024, the compensation of Microsoft Corp. CEO Satya Nadella soared by 63% to $79.1 million, mainly due to his stock awards, according to a recent filing with the U.S. Securities and Exchange Commission.

Key Details: Nadella’s stock awards dramatically increased to around $71 million, up from $39 million the previous year. During this period, Microsoft’s market value surpassed $3 trillion, highlighting the company's substantial growth.

However, despite the significant rise in stock awards, Nadella's cash incentives have decreased. He received $5.2 million in cash incentives, which is lower than the $10.7 million he was eligible for. Nadella requested this reduction following several cybersecurity breaches that occurred during the fiscal year.

According to the filing, “Nadella agreed that the Company's performance was extremely strong, but reflecting on his personal commitment to security and his role as the CEO, asked the Board to consider departing from the established performance metrics and reduce his cash incentive to reflect his personal accountability for the focus and speed required for the changes that today's cybersecurity threat landscape showed were necessary.” This request underscores Nadella's accountability and concern regarding security issues within the company.

Microsoft is recognized as a leader in the race for dominance in the generative artificial intelligence market, supported by its investment in OpenAI, the creator of ChatGPT.

In comparison to other tech leaders, Tim Cook, CEO of Apple Inc., earned $63.2 million in 2023, while Jensen Huang, CEO of AI-chip maker NVIDIA Corp., received a total payout of $34.2 million in fiscal 2024.

Significance: Nadella's salary increase comes at a time when Microsoft is making major advancements in the AI sector. The company is empowering businesses to develop their own autonomous AI agents, a development expected to transform how enterprises operate.

However, this progress has faced criticism as well. Marc Benioff, CEO of Salesforce, criticized Microsoft for its rebranding of the Copilot AI tool to “agents,” interpreting it as an indication of a reactive approach due to Microsoft’s struggles with data and security models.

Stock Performance: As of Thursday, Microsoft stock closed at $424.73, showing a year-to-date increase of 14.52%. In after-hours trading, the stock saw a slight decline of 0.068%. Over the past year, Microsoft’s stock has appreciated by 24.67%, showcasing strong market performance according to financial data.

salary, Microsoft, Nadella