Months after saying job cuts at Microsoft weighed on him, bossman Satya Nadella has another problem: how to expend his swelling bank balance following another bumper pay rise.
The chairman and chief executive of the software and cloud megacorp was handed total compensation of $96.5 million for Microsoft’s fiscal 2025, up almost 22 percent on the prior year. This includes a $2.5 million base salary, unchanged since 2023, $84 million in stock awards, $9.5 million in a non-equity incentive plan, and $196,000 for all other compensation.
Microsoft CEO feels weighed down by job cuts
But he’s worth it, Microsoft told shareholders in its Proxy Statement. Since Nadella became top dog in 2014, Microsoft has tripled revenue, quadrupled net income, and quintupled diluted earnings per share (EPS).
In the financial year ended June 30, Microsoft reported sales worth $281.7 billion, net profit of $101.8 billion, and EPS of $13.64. Revenue across every division was up by double digits, except LinkedIn, which declined, and Windows OEM and Devices, which grew 3 percent.
Nadella, Microsoft insists, should be financially rewarded in ways that “encourage his continued leadership and drive sustained business growth and shareholder value.” The pay is tied to Microsoft’s stock price, which has doubled in three years on the back of expectations about AI and Microsoft’s role therein.
“In accordance with this view and in contrast to standard market practice, Mr Nadella’s equity compensation is delivered exclusively through performance stock awards tied to long-term value creation and does not include any time-based equity awards. Including his annual cash incentive, more than 95 percent of Mr Nadella’s annual total target compensation opportunity was performance-based. For fiscal year 2025, we set Mr Nadella’s target performance stock award at $50 million, a level unchanged since fiscal year 2022.”
Other areas Microsoft highlighted for the most recent financial year included Azure revenue surpassing $75 billion, up 34 percent year-over-year, and the corp said it now has “70 operating regions and over 400 datacenters, and we added over two gigawatts of capacity in fiscal year 2025.” It has “430 million M365 Commercial paid seats and 89 million M365 consumer subscribers,” 1.2 billion LinkedIn members, and “230,000 organizations… have used Copilot Studio.” The Azure AI Foundry agent service has 14,000 customers. Advertising brings in $20 billion a year.
Microsoft didn’t confirm how many 365 Copilot licenses it has sold or how many of those Azure AI Foundry customers are paying for it.
Others in the C-suite were also well compensated. CFO Amy Hood was awarded $29.5 million, exec veep and CEO of Microsoft Commercial Judson Althoff was awarded $28.2 million, and Takeshi Numoto, exec veep and chief marketing officer – responsible for product bundling strategies, including Teams – was awarded $11.87 million.
As for the rest of the workforce? Those left after Nadella swung the ax in July and cut up to 9,000 jobs had a median pay of $200,972.
“Based on this information, for fiscal year 2025 the ratio of the annual total compensation of our CEO to the annual total compensation of the median employee was 480 to 1.” ®
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