Microsoft’s Chief Executive Officer, Satya Nadella, has seen his total compensation rise to $96.5 million for fiscal year 2025. This represents an increase of nearly 22 percent from the previous year. The compensation package includes a $2.5 million base salary that remains unchanged, along with significant stock awards valued at $84 million and a non-equity incentive plan amounting to $9.5 million.
Microsoft’s Performance and CEO Pay
Despite recent job cuts impacting nearly 9,000 employees, Microsoft believes Nadella’s financial reward is justified. Since Nadella took charge in 2014, the company’s achievements have been notable. Under his leadership, Microsoft has tripled its revenue, quadrupled net income, and quintupled diluted earnings per share (EPS).
Financial Highlights for Fiscal Year 2025
- Total revenue reached $281.7 billion.
- Net profit was reported at $101.8 billion.
- EPS stood at $13.64.
- Azure revenue exceeded $75 billion, growing by 34 percent year-over-year.
- Microsoft possesses 430 million paid M365 Commercial seats.
- There are 89 million M365 consumer subscribers.
- LinkedIn boasts 1.2 billion members.
- Microsoft’s advertising revenue amounts to $20 billion annually.
Equity Compensation and Incentives
Microsoft’s compensation strategy for Nadella is heavily performance-based. Over 95 percent of his total compensation is linked to performance stock awards aimed at long-term growth. The target performance stock award for fiscal year 2025 remains at $50 million, consistent with fiscal year 2022.
Executive Compensation and Workforce Impact
- CFO Amy Hood received $29.5 million.
- Judson Althoff, executive vice president and CEO of Microsoft Commercial, earned $28.2 million.
- Takeshi Numoto, chief marketing officer, was awarded $11.87 million.
The median compensation for Microsoft employees, post-restructuring, stands at $200,972. This results in a staggering ratio of 480 to 1 when comparing Nadella’s pay to that of the average employee.
As artificial intelligence continues to shape the future, Microsoft’s stock price has seen a significant uptick, reflecting investor confidence in the company’s trajectory. The board argues that such compensation ensures Nadella continues to foster business growth and enhance shareholder value.
