CEO Satya Nadella’s total compensation for the fiscal year has ballooned to an impressive $79.1 million, reflecting a staggering 63% increase from the previous year. This substantial hike comes despite a tumultuous period for the tech giant, marked by significant layoffs and high-profile cybersecurity breaches.
Compensation Breakdown Amidst Controversy
According to Microsoft’s latest regulatory filings, around 90% of Nadella’s compensation is in the form of company shares. Interestingly, the CEO opted for a $5 million pay cut to demonstrate “personal accountability” following the company’s recent cybersecurity incidents, which included a severe breach involving a Chinese hacking group that compromised email accounts of 25 organizations, including government agencies.
In March 2024, the U.S. government’s Cyber Safety Review Board criticized Microsoft’s security practices, stating they were “lacking” compared to other cloud service providers. Following this, Microsoft President Brad Smith publicly acknowledged the company’s failures, asserting that the organization must improve its cybersecurity measures.
A Year of Setbacks and Layoffs
This year has been particularly challenging for Microsoft, which executed two rounds of mass layoffs, eliminating over 2,500 positions since acquiring Activision Blizzard for $69 billion in October 2023. The layoffs included 1,900 jobs lost at Activision Blizzard and Xbox in January and an additional 650 positions cut last month. Furthermore, the company shut down four game studios—Arkane Austin, Tango Gameworks, Alpha Dog Games, and Roundhouse Games—earlier this year.
Despite these setbacks, Microsoft is committed to enhancing its security protocols, pledging an overhaul of its cybersecurity infrastructure with the establishment of six prioritized “security pillars” to guide future improvements.
Executive Pay Increases Across the Board
Nadella’s pay increase isn’t an isolated incident. Other top executives at Microsoft also saw significant raises this year, with Chief Financial Officer Amy Hood’s package rising 30% to $25.8 million, and President Brad Smith’s compensation increasing 29% to $23.4 million.
As Microsoft navigates these challenging times, Nadella’s pay package highlights the ongoing debate surrounding executive compensation amidst workforce reductions and security vulnerabilities, prompting discussions about accountability and corporate governance.
For further details, visit PC Gamer.