Nadella gave up millions of dollars in compensation following cyberattacks. Microsoft’s strong performance meant a 63% pay bump anyway
Microsoft $MSFT (MSFT) chief executive Satya Nadella got a 63% pay bump in the last fiscal year thanks to the company’s blowout financial performance. He could have netted millions more had it not been for a number of cybersecurity breaches at the tech giant.
Given Microsoft’s strong performance during the fiscal year ending June 30, Nadella received a total of $79.1 million for the fiscal year that ended June 30, up from $48.5 million in 2023, Microsoft disclosed in a regulatory filing Thursday.
That’s mainly comprised of stock awards worth $50 million. Nadella also received a cash incentive of $5.2 million — less than half what he would have received based solely on the company’s financial and operational performance for the fiscal year.
“Mr. Nadella agreed that the Company’s performance was extremely strong, but reflecting on his personal commitment to security and his role as the CEO, asked the Board to consider departing from the established performance metrics and reduce his cash incentive to reflect his personal accountability for the focus and speed required for the changes that today’s cybersecurity threat landscape showed were necessary,” the compensation committee wrote in a letter to shareholders.
Microsoft was the target of a series of major cyberattack campaigns in 2023 and early 2024. In April, the U.S. Cyber Safety Review Board (CSRB) found that Chinese hackers known as Storm-558 compromised the Microsoft Exchange Online emails of 22 organizations and more than 500 people around the world, including senior U.S. government officials working on national security.
The report, released by the U.S. Department of Homeland Security (DHS), found the attack was “preventable,” and that a series of Microsoft’s operational and strategy decisions led to “a corporate culture that deprioritized enterprise security investments and rigorous risk management.”
In January of this year, Microsoft’s corporate email systems were attacked by Midnight Blizzard, a Russian state-sponsored actor. The company said in March it could see evidence of the hackers using stolen information to gain access to its “source code repositories and internal systems.” Microsoft said it hadn’t seen evidence its customer-facing systems were compromised.
For the 2025 fiscal year, the committee said added a new performance category based on cybersecurity accountability. It also enhanced its executive compensation program to reflect leadership’s focus on the company’s AI goals.
Over 95% of Nadella’s compensation is performance-based, and typically 70% of the annual cash incentive is tied to achieving pre-established financial targets. Last year, Microsoft shareholder returns totaled 32%, which meant Nadella was eligible for a more than 138% payout as a percentage of the company’s target.
— Britney Nguyen contributed to this article.
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