Microsoft CEO Satya Nadella’s compensation for fiscal year 2024 rose by more than 63% to $79.1 million, despite his request for a pay cut following recent cybersecurity incidents. According to Microsoft’s annual proxy statement, Nadella’s total compensation, primarily in stock, would have been $5.5 million higher if not for a reduction in his cash incentive, which he requested to acknowledge security lapses.
The pay adjustment came after cyber incidents raised security concerns, including a high-profile breach involving China accessing U.S. government officials’ emails, which Microsoft disclosed in July. Earlier in January, Microsoft revealed that Russian intelligence had accessed emails of some top executives.
In response to these security challenges, Nadella communicated Microsoft’s renewed commitment to cybersecurity, pledging in a May memo to prioritize security across the company. Subsequently, Microsoft announced plans to evaluate employees’ cybersecurity efforts as part of their compensation assessments.
Originally, Nadella’s cash incentive was set at $10.66 million, based on Microsoft’s strong revenue and operating income achievements. However, the board’s compensation committee approved a reduced incentive of $5.2 million after Nadella urged the board to reflect his accountability for enhancing the company’s security posture.
Microsoft’s security segment has grown significantly, generating over $20 billion in revenue in 2022 — a figure that surpasses the total revenue of many standalone security firms. The company has committed to improving security practices in light of recent incidents, which a government report noted could benefit from greater focus at the CEO and board level.
