Stock awards and cash incentive fuel Satya Nadella's pay hike
Microsoft Chief Executive Officer Satya Nadella is getting a total compensation of $96.4 million in the fiscal year 2025, up by nearly 22% from the $79.1 million the previous year.
The increase comes as his stock awards and cash incentive increased to $84.2 million and $9.55 million, respectively.
His base salary, however, stayed the same at $2.5 million.
"The independent members of our Board did not increase the base salary of Mr. Nadella, which it continued to believe was reasonable and appropriate given his role, capabilities, and experience, as well as the Company's relative scale and performance," the company said in a proxy filing.
As for Nadella's cash incentive awards, Microsoft said it based the amount on financial results and operational performance results.
The tech giant highlighted Nadella's leadership on Microsoft's Secure Future Initiative, which is its largest cybersecurity project in history.
It also underscored Nadella's leadership in cybersecurity, as well as the company's AI-first transformation.
"Mr. Nadella continued to directly lead Microsoft's ongoing execution of our transformation to meet the needs of our growing customer and stakeholder base. This leadership was clear in our AI-first platform focus and evidenced in new products and services," the company said.
Nadella also furthered the company's high-performing culture, according to Microsoft, such as maintaining a growth mindset during the company's transformation efforts.
He also provided leadership on AI policy issues, and met or exceeded interim targets toward 2030 sustainability commitments.
Job cuts at Microsoft
Nadella's pay bump comes after Microsoft laid off 15,000 people in 2025 through a series of job cuts.
The CEO previously described the cuts as the "most difficult" decisions they had to make.
"I want to express my sincere gratitude to those who have left," Nadella said in a memo in July. "Their contributions have shaped who we are as a company, helping build the foundation we stand on today. And for that, I am deeply grateful."
Meanwhile, the pay bump also comes amid growing scrutiny on CEO pay and the gap with the average pay of regular employees.
Findings from the Institute for Policy Studies revealed that there is a pay ratio of 632 to 1 between employees and the CEOs of 100 S&P 500 corporations with the lowest median worker pay.
At Microsoft, a median employee of the company earned $200,972 for FY25.
"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," Microsoft said.
"We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934."
