What you need to know
- Microsoft CEO Satya Nadella received just below $55 million worth of compensation in 2022.
- That marks a 10% increase compared to 2021.
- 96% of his compensation was performance-based, up from 71% in 2021.
Microsoft CEO Satya Nadella saw a 10% increase in compensation in 2022 compared to the previous year. Microsoft’s Proxy Statement 2022 broke down a long list of figures, including how much money Nadella would make this year. While the CEO’s base salary of $2.5 million is unchanged, his stock awards went up to $42.269 million (up from $33 million in 2021).
“During fiscal year 2022, we addressed the need to provide ongoing incentives to Mr. Nadella following the February 2021 final vest of long-term performance stock award granted at Mr. Nadella’s 2014 promotion to CEO,” said Microsoft’s SEC filing.
“Mr. Nadella’s criticality to Microsoft’s ongoing success was a regular focus of feedback we received from shareholders, which is consistent with our independent Board members’ high confidence in Mr. Nadella’s exceptional leadership of Microsoft.”
The filing outlines its pay for performance figures:
- Over 95% of the annual target compensation opportunity for the CEO is performance-based and over 50% for our other Named Executives
- Our annual cash incentive is determined based on pre-established financial targets (70% for our CEO and 50% for our other Named Executives), with the other portion determined based on operational performance in three weighted performance categories
- The metrics for our performance stock awards are reviewed annually to ensure they reflect key business developments that drive long-term growth
- Our performance stock awards (“PSAs”) include a relative total shareholder return (“TSR”) modifier to reward significant positive outperformance and reduce rewards for underperformance to align executives’ and shareholders’ long-term interests
- At least 70% of target compensation for our Named Executives was equity-based, with average across all Named Executives over 80%, providing incentives to drive long-term business success and direct alignment with returns to shareholders
Arguably the most important point here is that over 95% of Microsoft CEO Satya Nadella’s compensation is tied to company performance. It’s also worth noting that his base salary, while high, is relatively low when compared to his stock awards and other compensation.
