Microsoft CEO Satya Nadella saw his total compensation rise 3% to $44.32 million during the company’s fiscal year 2020 that ended in June.
The number, revealed in an annual filing disclosed Monday, includes Nadella’s salary ($2.5 million), stock awards ($30.72 million) and cash bonuses ($10.99 million). The cash bonus is based on the board’s review of the CEO’s performance.
Here’s the breakdown of Nadella’s compensation and other Microsoft executives over the last few years:
Microsoft reported record revenue of $143 billion, up 14%, during fiscal year 2020, with net income up 13% to $44.3 billion. The company’s stock is up more than 30% this year.
The proxy includes an evaluation of Nadella’s performance in 2020 based on three categories: product and strategy, customers and stakeholders, and culture and organizational leadership. Out of a possible 200 percent rating, Nadella scored a 146.6% grade. Nadella was lauded for growing the company’s commercial cloud business; increasing GitHub developers and Xbox Game Pass subscriptions; and for his leadership amid the COVID-19 crisis, among other accolades.
“The Board views his strong leadership of the Company’s actions in response to the unique challenges of 2020 as unparalleled,” the filing said, adding that “Mr. Nadella led Microsoft’s transformation in response to COVID-19, including devoting technology and resources to ensure customers, such as government agencies, schools, medical facilities, and other front-line responders, had the virtual collaboration and other digital tools to successfully navigate the unprecedented challenges of 2020.”
The board also called out Nadella’s “tremendous progress driving cultural change across the organization,” citing survey data that shows 95% of employees feeling proud to work at Microsoft.
The annual proxy reveals how Nadella’s compensation compares to the median employee at Microsoft, which came in at $172,142, or a 257-to-1 ratio. That’s up from a 249-to-1 ratio last year.
Microsoft also said it increased the performance-based portion of Nadella’s equity awards from 50% to 70% for fiscal year 2021, and increased the weighting of the financial performance portion of Nadella’s annual cash incentive from 50% to 70%. The moves reflect a continued shift to a higher percentage of performance-based compensation for Microsoft’s senior leaders.
As part of its CEO succession plan reviewed annually, the board noted in the filing that it is “committed to actively seeking highly qualified women and individuals from minority groups to include in the pool of potential CEO candidates.”
Shareholders will get the chance to have their say in an advisory vote on the compensation awarded to Nadella and other executives at the company’s annual shareholder meeting at 8 a.m. on Dec. 2, along with several other matters.
