There may be a ‘China angle’ in Microsoft CEO Satya Nadella’s $5.5 million ‘salary cut’

Microsoft CEO Satya Nadella saw a 63% increase in his salary for the financial year 2024. As revealed by the company in a U.S. Securities and Exchange Commission (SEC) filing, Nadella’s total compensation for the financial year that ended in June 30, amounted to approximately $79.1 million (around Rs 665 crore). This increase was mainly driven by the stock awards. The filing revealed that his stock awards increased to $71 million from $39 million the previous year.

Satya Nadella requested for reduction in cash compensation

As per the SEC filing, Nadella’s cash incentive for fiscal year 2024 was $5.2 million. He was originally intended to get $10.7 million. The software giant’s boss received $2.5 million as base salary and $170,000 in other compensation.
The filing revealed that Nadella requested a pay cut this year on account of multiple cybersecurity breaches, including the Microsoft outage in July this year that impacted Windows users across the world. The US Department of Homeland Security in April published a report after an independent review of China’s breach of US government officials’ email accounts. Microsoft disclosed the incident in July 2023. In January, the tech giant confirmed that Russian intelligence had accessed some of its top executives’ email accounts.
“Mr. 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,” the filing read.

Breakdown of Satya Nadella’s Earnings

What the filing said

It said “Since the board of directors appointed Mr Nadella as the third chief executive officer in its history in 2014, Microsoft has nearly tripled revenue to $245.1 billion (approximately Rs 2,060 crore), nearly quadrupled net income to $88.1 billion (approximately Rs 740 crore), and more than quadrupled diluted earnings per share to $11.80 (approximately Rs 99 crore). In addition to another year of consistently strong financial performance, Mr Nadella and his leadership team have positioned Microsoft to continue to drive performance for years to come,”.