By Microsoft CEO Satya Nadella saw his total compensation surge by 63% to $79.1 million last year, despite personally requesting a reduction in pay to acknowledge cybersecurity failures at the tech giant, creating an apparent paradox in corporate accountability.
Nadella’s request for a pay cut resulted in his cash compensation being slashed by more than half to $5.2 million, reflecting what he termed “personal accountability” for several cyber attacks, including a Chinese-linked breach affecting twenty-five organizations. However, this reduction represented less than seven percent of his total package, as stock options worth $71.2 million drove his overall compensation dramatically higher.
The compensation committee defended the package in its letter to shareholders, citing Microsoft’s “extremely strong” performance and 16% revenue growth through June 2024. This growth came amid widespread job cuts across the company’s divisions and multiple security incidents that prompted Nadella’s original request for reduced compensation.
“Mr. Nadella agreed that the Company’s performance was extremely strong,” the committee wrote, while acknowledging his unprecedented request to “depart from the established performance metrics and reduce his cash incentive to reflect his personal accountability” over cybersecurity breaches.
High Pay Centre director Luke Hildyard questioned the effectiveness of such symbolic reductions: “We might ask whether the extra $79 million on top of $49 million last year for someone who is already worth hundreds of millions, with more money than they could spend over multiple lifetimes of absolute luxury, is really necessary as a reward or incentive.”
The compensation package places Nadella among tech’s highest-paid executives, though still below Tesla’s Elon Musk’s potential $56 billion package. Apple CEO Tim Cook earned $63.2 million in 2023, while Nvidia chief Jensen Huang received $34.2 million in fiscal 2024.
The apparent contradiction between Nadella’s request for accountability and his increased total compensation raises questions about corporate governance and the structure of executive pay packages in an era of increasing cybersecurity challenges.
