CEO Satya Nadella has been awarded a staggering $79.1 million pay package, reflecting a 63% increase from the previous year. This notable rise comes despite the company facing layoffs and severe cybersecurity issues that have raised questions about its security practices.
Majority in Stock Shares
According to recent regulatory filings, approximately 90% of Nadella’s compensation for the fiscal year ending June was in Microsoft shares. This lucrative package would have been $5 million higher, had Nadella not requested a pay cut as a gesture of “personal accountability” in light of the company’s cybersecurity failures. This acknowledgment comes after the U.S. government’s Cyber Safety Review Board criticized Microsoft’s security measures as “lacking” compared to competitors in the cloud space.
Cybersecurity Concerns Intensify
The scrutiny of Microsoft intensified following a breach involving a Chinese hacking group that compromised email accounts of 25 organizations, including government agencies. Microsoft President Brad Smith faced Congress to address these concerns, admitting, “we acknowledge that we can and must do better,” and expressing regret for the impact on those affected. In November 2023, another breach attributed to a Russian state-sponsored actor compromised a small percentage of Microsoft’s corporate email accounts, further straining trust in the company’s cybersecurity measures.
Layoffs and Strategic Restructuring
This year has not been easy for Microsoft employees, with two rounds of mass layoffs leading to the loss of 2,500 jobs, particularly at Activision Blizzard, which Microsoft acquired for $69 billion in October 2023. The company also shuttered four game studios, reflecting a broader strategy to streamline operations amid financial and security challenges.
Despite these upheavals, Nadella’s compensation package surpasses his previous highs, although it does not reach the $84 million he earned in 2014. Other Microsoft executives have also seen substantial pay increases, with CFO Amy Hood’s compensation rising 30% to $25.8 million and President Brad Smith’s package growing 29% to $23.4 million.
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