Microsoft Is Paying CEO Satya Nadella $84 Million

Microsoft Satya Nadella
Microsoft CEO Satya Nadella Flickr/n.bhupinder

Microsoft just revealed how much it is paying its new CEO, Satya Nadella. All told for the first year, it’s a package worth $US84 million, the company said in a regulatory filing.

It breaks down like this:

  • base salary of $US918,917,
  • a cash bonus of $US3.6 million,
  • a one-time grant of stock valued at $US59.2 million in connection with his promotion to CEO that he will not be able to cash out until 2019,
  • and another one-time stock grant worth $US13.5 million given to him in August 2013, to keep him around during the CEO search process.

With these grants, his stock holdings jumped from 231,116 shares before he was CEO, to 4.9 million shares after he got the job.

Microsoft says that without the one-time stock grants, his compensation adds up to the much more modest sum of $US11.6 million. The company also agreed to a $US17.4 million golden parachute if the whole CEO gig doesn’t work out.

It’s hard to compare this pay to Steve Ballmer’s. Ballmer’s money mostly comes from the enormous stake he still holds, 4% of the company, 333 million shares. In 2014, Ballmer made $US483,584 in salary. Which isn’t a lot of money for a CEO but he also left the job in February.

Nadella’s first-year compensation pay package does fairs well compared to other first-year tech CEOs:

Oracle is paying its new co-CEOs Safra Catz and Mark Hurd $US37.7 million apiece for their first year since they were handed these new titles, including their one-time stock awards. And that was a pay cut from $US44 million the year before. Their jobs haven’t really changed. And their boss, Larry Ellison, is still higher paid. He’s making $US67 million in 2014.

Tim Cook’s first-year pay was off the charts: a staggering $US378 million, mostly from a huge one-time stock grant. His pay has since come down to a mere $US4.3 million in 2013 (but about $US70 million of his stock options vested that year, too).

Marissa Mayer was paid $US36.6 million her first year as the CEO of Yahoo.

IBM CEO Ginni Rometty was paid $US16.1 million for her first year.

Meg Whitman’s pay package was valued at $US15.3 million for her first year, but under her reign, the stock has tripled in value, so those one-time stock awards are worth a lot more now.

Nadella’s pay is of particular interest since he’s indicated that he’s never asked for a raise in his life. He prefers to work hard and trust that the system will reward him appropriately.

We don’t know if that means that he doesn’t negotiate for a salary when taking on a new job. But whatever he’s doing, his methods are working for him.