Microsoft CEO Satya Nadella’s compensation rises 63% to $79 million despite his request for a pay cut

What just happened? In a scenario that the vast majority of us will never experience, Microsoft boss Satya Nadella has seen his take-home pay increase 63% compared to last year despite the CEO requesting the amount he receives be reduced. While Nadella’s salary was cut by 50%, other forms of his compensation increased significantly, bringing his total to $79.11 million in fiscal 2024, up from $48.51 million a year earlier.

Nadella requested that his pay be reduced as a reflection of his accountability in relation to the company’s security failures, including the major cyberattacks against Microsoft’s and the CrowdStrike fiasco.

The incidents led to Nadella making security a “top priority” above all else at Microsoft, which now ties employee bonuses and promotions to security performance.

Microsoft’s board compensation committee agreed to Nadella’s request, reducing his cash incentive from the $10.7 million he was set to receive by more than 50% to $5.2 million.

Like most CEOs, the majority of Nadella’s compensation – around 90% – comes in the form of stock awards. This year saw those awards increase from $39 million in 2023 to around $71 million as Microsoft’s market cap passed $3 trillion.

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“The Board reviewed the Company’s performance and firmly believes that Mr. Nadella provided exceptional leadership and was both critical in achieving the extremely strong performance of the Company and personally responsible for the ongoing repositioning of its investments and priorities,” the Microsoft Compensation Committee wrote in a filing.

“It also considered the factors that Mr. Nadella raised in requesting a reduction of his cash incentive and concluded that such an adjustment was appropriate.”

Surprisingly, this isn’t the largest award Nadella has received during his time at the head of Microsoft. He was paid $84 million in 2014, the same year he became the Redmond giant’s third chief executive.

Other Microsoft execs also received a pay bump. President Brad Smith’s compensation was up 29% to $23.4 million, while Chief Financial Officer Amy Hood saw a 30% increase to $25.8 million.

Microsoft’s valuation has increased by more than tenfold in the decade since Nadella took over from Steve Ballmer. Its share price has continued to grow in recent times, up from $327 one year ago to $427 today. It is currently the third-largest company in the world by market cap, sitting behind Nvidia and leader Apple.