Microsoft CEO Satya Nadella speaks at an event at the company's campus in Redmond, Washington, on May 20, 2024.
Chona Kassinger | Bloomberg | Getty Images
Microsoft CEO Satya Nadella has been given a pay raise for fiscal year 2024 of more than $30 million. But his total collection would have been $5.5 million higher if not for a series of cyberattacks.
Nadella earned $79.1 million for the fiscal year ending June 30, up from $48.5 million the previous year, according to a proxy filing Thursday. Most of his salary comes in the form of stocks. The board's compensation committee said Nadella requested that the cash incentive portion reflect security issues.
The requested reduction came after the US Department of Homeland Security in April published a report that followed an independent review of China's breach of email accounts of US government officials. Microsoft revealed this incident in July 2023.
In January this year, Microsoft said that Russian intelligence had access to some of the email accounts of the company's top executives.
Microsoft said it would revamp its practices to address shortcomings highlighted by the government report, which said that “customers will benefit from its CEO and Board of Directors' direct focus on the company's security culture.”
Nadella responded by telling employees in a May memo that Microsoft would prioritize security above all else. In June, Microsoft said it would take into account employees' cybersecurity efforts when determining their compensation.
The cash incentive portion of Nadella's pay mostly takes into account the software maker's performance with respect to revenue and operating income goals. It was originally supposed to be $10.66 million, but the board approved a cash incentive of $5.2 million instead.
“Mr. Nadella agreed that the company's performance was very strong, but given his personal commitment to security and his role as CEO, he asked the Board to consider departing from established performance metrics and reducing his cash incentives to reflect his personal responsibility for the focus and speed required for the changes demonstrated by the landscape,” the committee wrote. Today's cybersecurity threat was essential.
Microsoft's security business generated revenue of more than $20 billion in 2022, more than the combined revenue of many security companies.
