Microsoft gives Satya Nadella a 66% raise, citing 'strategic leadership'

Key Points
  • Satya Nadella replaced Steve Ballmer as CEO in February 2014.
  • Microsoft's independent board directors bumped Nadella's base salary for the most recent fiscal year.
  • Nadella also received more stock awards.
Satya Nadella, chief executive officer of Microsoft Corp., speaks during a meeting of the Economic Club of Washington in Washington, D.C., on Oct. 4, 2017.
Zach Gibson | Bloomberg | Getty Images

Satya Nadella received more money from Microsoft in the most recent fiscal year as the company achieved business targets and grew its stock price.

The CEO received $42.9 million in total compensation, mostly in stock awards, in the 2019 fiscal year that ended on June 30, according to Microsoft's annual proxy statement, which came out on Wednesday. The figure is up 66% from the prior fiscal year but lower than the $84.3 million Nadella received in the 2014 fiscal year, when he took over from Steve Ballmer.

Nadella's pay bump highlights Microsoft's turnaround under his leadership, as it's doubled down on cloud services. A year ago Microsoft took back from Apple the title of most valuable public company in the world; on Wednesday its market capitalization exceeded $1.07 trillion.

Nadella received a $1 million base salary bump, and an increase in stock awards. In reviewing his equity compensation Microsoft's independent directors pointed to "Mr. Nadella's strategic leadership, including his efforts to strengthen trust with customers, drive for a company-wide culture change, and successful entry and expansion into new technologies and markets."

The independent directors also cited the growth of Microsoft's Intelligent Cloud business, which includes the Azure cloud that competes with Amazon Web Services. Intelligent Cloud was the largest of Microsoft's three segments for the first time in more than three years in the most recent quarter.

Microsoft in the 2019 fiscal year continued to exceed several key targets, including LinkedIn sessions, revenue from Commercial Cloud services and Windows 10 monthly active devices. And in the fiscal year Nadella received part of a long-term performance-based stock award.

"During the first five-year performance period, Microsoft's market capitalization increased $509 billion (from $302 billion to $811 billion), and Microsoft's relative TSR was in the 97th percentile, resulting in Mr. Nadella earning and vesting in the maximum 900,000 shares," Microsoft said in the filing.

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