Microsoft CEO Nadella's compensation drops... to $48M

Microsoft boss Satya Nadella was paid $48.5 million in compensation for running the business in 2023 – the lowest amount he received in the past three years due to smaller stock awards and other incentives.

This comes months after the long-serving CEO, who has made an estimated $1 billion in financial packages since becoming CEO in 2014, told full-time salaried staff their pay was frozen due to a slowdown in revenue growth.

Nadella himself walked away with less in fiscal 2023 compared to the $54.94 million he got last year, and the $49.85 million the 12 months before that.

The latest pay pack comprised $2.5 million in salary, unchanged; $39.23 million in stock; $6.4 million in non-equity incentives; and $360k for all other compensation. Nadella fell slightly short in his target for financial results but exceeded targets for operational results, meaning he met 85.5 percent of the goals set.

All of this during a fiscal year when Microsoft grew revenue by 11 percent to $211.9 billion, operating income edged up to $88.5 billion from $83.38 billion, and net income was flat at $72.36 billion. Cloud revenue alone grew 22 percent to a staggering $111.6 billion, albeit slower than recent years.

More than 95 percent of Nadella's annual target compensation goal is performance-based and 70 percent of the annual cash incentive is related to meeting pre-established financial metrics.

What is the CEO pay ratio in relation to the rest of the workforce these days?

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"The annual total compensation for the median employee of the Company (other than our CEO) was $193,770 and the annual total compensation of our CEO was $48,512,537," Microsoft says in its proxy statement 20203.

A year ago the average pay was $190k and the CEO to grunt ratio was 289 to 1, way higher than the 250 to 1 it currently is.

As for the other executives in Nadella C-suite, CFO Amy Hood was paid $19.9 million; top sales office Judson Althoff received $16.2 million; President Brad Smith got $18.1 million; and Christopher Young, who is exec veep for business development, strategy and ventures, pocketed $9.8 million. ®