Microsoft CEO Satya Nadella’s pay package has increased by 63% compared to the previous year, totaling $79.1 million despite a tumultuous year marked by layoffs and cybersecurity breaches. The bulk of Nadella’s compensation is tied to Microsoft shares, reflecting the company’s strategic focus on maintaining shareholder value even amidst challenges.
A Response to Accountability
According to recent regulatory filings, about 90% of Nadella’s package comes from equity in the company. Interestingly, the total could have been $5 million higher had he not requested a pay cut to acknowledge “personal accountability” for Microsoft’s cybersecurity failures. These failures were highlighted in a report by the U.S. government’s Cyber Safety Review Board, which described Microsoft’s security practices as “lacking” when compared to competitors in the cloud space.
Earlier this year, Microsoft faced scrutiny after a security breach linked to a Chinese hacking group compromised email accounts across 25 organizations, including several government entities. The situation prompted Microsoft President Brad Smith to admit in front of Congress that the company needed to improve its security protocols, expressing regrets for those affected.
Layoffs and Company Restructuring
The year has been rocky for Microsoft, with significant layoffs impacting its workforce. Earlier in the year, the company laid off 1,900 employees from Activision Blizzard and Xbox, followed by an additional 650 job cuts last month. Since acquiring Activision Blizzard for $69 billion in October 2023, Microsoft has let go of over 2,500 employees and shuttered four gaming studios. These actions underscore a broader trend of restructuring within the company as it navigates market pressures.
Compensation Trends at Microsoft
Despite the company’s challenges, Nadella is not alone in seeing an increase in compensation. Chief Financial Officer Amy Hood’s pay package rose by 30% to $25.8 million, while President Brad Smith received a 29% increase, bringing his total to $23.4 million. This trend raises questions about corporate governance and the disconnect between executive pay and employee job security.
While Nadella’s new compensation reflects his significant role in leading Microsoft through innovation and transformation, it stands in stark contrast to the experiences of many employees impacted by the company’s recent decisions. For more details, visit PC Gamer.