Despite a challenging year marked by cybersecurity incidents and significant layoffs, Microsoft’s CEO Satya Nadella has seen a remarkable 63% increase in his pay package, reaching a total of $79.1 million. This figure, disclosed in Microsoft’s latest regulatory filings, includes approximately 90% in company shares, aligning with the tech giant’s compensation structure for its top executives.
Nadella’s Pay Reflects Strong Stock-Based Compensation
Nadella’s hefty pay rise would have been even higher—an additional $5 million—had he not requested a reduction as a personal accountability gesture following Microsoft’s cybersecurity challenges. The increase in compensation arrives as Microsoft faces scrutiny over its handling of high-profile security breaches and a series of workforce reductions that have reshaped the company’s workforce. The CEO’s pay boost has raised eyebrows, given the backdrop of layoffs affecting thousands of employees and criticism from cybersecurity experts regarding Microsoft’s vulnerability management.
Cybersecurity Setbacks Prompt Reforms
In March, the U.S. Cyber Safety Review Board called out Microsoft for lagging behind other cloud providers in security practices, spotlighting a breach that allowed a Chinese hacking group to infiltrate the email accounts of 25 organizations, including government agencies. Microsoft’s President Brad Smith later apologized in front of Congress, acknowledging the need for substantial improvements in the company’s cybersecurity posture. To address these concerns, Microsoft pledged a thorough overhaul of its security framework, including the introduction of six “security pillars” aimed at strengthening its defenses.
The company was also hit by a second breach involving a Russian hacking group, “Midnight Blizzard,” in late 2023. This incident led to a compromise of a small percentage of corporate email accounts, prompting Microsoft to continue reinforcing its cybersecurity protocols.
Mass Layoffs Hit Microsoft Divisions Following Activision Acquisition
This turbulent period for Microsoft was further compounded by mass layoffs that impacted both Activision Blizzard and Xbox divisions. Following Microsoft’s $69 billion acquisition of Activision in October 2023, the company laid off more than 2,500 employees across various studios, including closures of Arkane Austin, Tango Gameworks, Alpha Dog Games, and Roundhouse Games.
Compensation Increases Extend to Microsoft’s C-Suite
Nadella’s compensation surge wasn’t the only one in Microsoft’s executive ranks. Chief Financial Officer Amy Hood received a 30% increase, bringing her total pay to $25.8 million, while Brad Smith’s compensation rose by 29% to $23.4 million. These raises underscore Microsoft’s confidence in its leadership, despite the company’s recent obstacles.
As Microsoft navigates a landscape of increased security demands and organizational restructuring, the compensation of its executives highlights the company’s high-stakes approach to leadership and shareholder interests.
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