Microsoft chief Satya Nadella sees pay soar 63 percent for latest financial year, even though he requested cut to cash incentive
The pay of Microsoft chief executive Satya Nadella soared 63 percent to $79.1 million (£61m) for the financial year ended 30 June, in spite of a component of it being reduced by millions.
Nadella’s pay consisted of a $2.5m salary, $71.2m in stock options, a $5.2m cash incentive and $170,000 in other compensation, according to a proxy filing, up from a total of $48.5m the previous year.
Microsoft’s stock price has soared more than 30 percent during the period, boosting the value of Nadella’s stock options.
But Nadella asked the board of directors to reduce his cash incentive by half from an original amount of $10.7m due to a number of high-profile cybersecurity breaches during the period.
Incentive reduction
Microsoft was heavily criticised over the breaches, which included one in January that gave attackers access to data belonging to the Home Office, multiple US federal agencies and corporate customers using Microsoft infrastructure.
The filing said that while Nadella “agreed that the Company’s performance was extremely strong” he “asked the Board to consider departing from the established performance metrics and reduce his cash incentive to reflect his personal accountability” for cybersecurity issues.
The stock option component of Nadella’s pay was worth $39m in the previous year.
The rise in Microsoft’s stock price has seen its market capitalisation edge above $3tn, along with those of Apple and Nvidia.
Investors are betting that all three companies will benefit from the growth of the generative AI industry.
Microsoft is a key investor in ChatGPT developer OpenAI, as well as a major cloud infrastructure supplier, and is building AI capabilities into Windows.
The company’s revenue grew 16 percent year-on-year to $245bn for the financial year, with operating income up 24 percent to $109bn.
Tech bosses
Nadella’s pay is comparable to other leaders of major tech firms, including Apple chief executive Tim Cook, who was paid $63.2m for Apple’s most recent financial year, and Nvidia chief Jensen Huang, who was paid $34.2m.
An outlier is Tesla chief executive Elon Musk, who in June won shareholder approval for a pay package that could be worth up to $56bn, depending on Tesla’s share price.
Musk’s pay deal was originally approved in 2018, but was vetoed in January by a Delaware judge who found Tesla’s board of directors had failed to prove the plan was “fair” and was not independent of Musk.
Tesla is in the process of moving its legal incorporation to Texas, which may shift jurisdiction for disputes over the pay plan to Texas courts.
