Microsoft CEO Satya Nadella Gets $79.1 Mln Pay In 2024, Up 63%

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(RTTNews) - Microsoft Corp.'s Chairman and Chief Executive Officer Satya Nadella received a pay raise of around 63% in fiscal 2024, with most of the package being in the shares of the tech major.

Meanwhile, the cash incentive was more than 50 percent lower than Nadella would have been awarded, following his request for a reduction amid recent security issues.

According to a regulatory filing, Nadella received $79.11 million worth compensation for fiscal 2024, higher than last year's $48.51 million. The pay package included $2.5 million salary, while $71.24 million was in stock awards, and $5.20 million in non-equity incentive plan compensation.

The significantly higher payment, which is said to be his highest so far since he was paid $84 million in 2014, comes amid the artificial intelligence boom, as the company is focused on ensuring the world benefits from the broad technological shift to AI, while mitigating its risks.

In the filing, the Compensation Committee noted that it has executed on pay for performance philosophy. Over 95 percent of the annual target compensation opportunity for CEO is performance-based. Cash incentive awards are structured 70% for CEO, based on pre-established goals, such as balance of growth and profitability goals. The remaining 30 percent for CEO is based on operational performance as assessed across three performance categories, diversifying the risk associated with any single aspect of performance.

Meanwhile, Nadella had requested for a reduction in the cash incentive portion of his pay due to the recent security issues.

Based on the assessment of operational and financial performance, Nadella would be eligible for a cash incentive of $10.66 million for fiscal year 2024.

Meanwhile, the committee approved a fiscal year 2024 cash incentive of $5.2 million, which represents a more than 50 percent reduction compared to what he would have been awarded based on the combined assessment of strong financial and operational performance.

The committee wrote in the filing, "Nadella agreed that the Company's performance was extremely strong, but reflecting on his personal commitment to security and his role as the CEO, asked the Board to consider departing from the established performance metrics and reduce his cash incentive to reflect his personal accountability for the focus and speed required for the changes that today's cybersecurity threat landscape showed were necessary."

However, according to the Board, Nadella provided exceptional leadership and was both critical in achieving the extremely strong performance of the company and personally responsible for the ongoing repositioning of its investments and priorities.

In a May memo to employees, Nadella had stated that Microsoft would prioritize security above all else. In June, the company said it would consider employees' cybersecurity efforts when deciding on their compensation.

Among others, Amy Hood, Executive Vice President and Chief Financial Officer, received $25.80 million in 2024, higher than prior year's $19.90 million. Judson Althoff, Executive Vice President and Chief Commercial Officer, received $23.05 million, compared to $16.20 million in the prior year.