New Delhi: The salary of Satya Nadella, the Indian-origin CEO of America’s giant IT company Microsoft, increased by 63% to about $ 7.91 crore (about Rs 665 crore) in the financial year 2024. U.S. According to the Securities and Exchange Commission (SEC) filing, Nadella’s stock awards have been increased significantly. Last year, he received a stock award worth $39 million, which has now been increased to $71 million. However, the filing also revealed that Nadella requested a reduction in his cash compensation, citing cybersecurity concerns. He also hinted at a possible ‘China angle’ behind this decision. According to the SEC filing, Nadella’s package for FY 2024 includes a stock award worth $7.12 crore (approximately Rs 600 crore). Similarly, he will get $52 lakh (about Rs 44 crore) as non-equity incentive plan. His base salary will be $25 lakh (more than Rs 21 crore). He will also receive $170,000 (approximately Rs 15 lakh) as miscellaneous compensation. But his cash incentive was reduced from $10.7 million to $52 million. His base salary and additional compensation bring his total cash-based income to approximately $7.87 million.
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breach of china
Nadella requested this cut due to increasing cyber security threats and breaches. The company has recently faced several cyber security breaches. A global outage affected Windows users in July 2023. Earlier in April, the U.S. The Department of Homeland Security had published a report. It was said that China had breached the email accounts of American officials. Microsoft revealed this in July. In January, Russian intelligence accessed the email accounts of some top Microsoft executives.
The SEC filing said Nadella had asked the board to deviate from established performance metrics and consider reducing his cash incentives, given his personal commitment to security and his role as CEO. Nadella became the CEO of Microsoft in 2014. During his tenure, company revenue has nearly tripled to $245.1 billion. Net income quadrupled to $88.1 billion. Earnings per share increased to $11.80.
Interview Between Time.news Editor and IT Industry Expert
Editor: Welcome to Time.news, and thank you for joining us today. We have the pleasure of speaking with Dr. Anjali Mukherjee, a renowned expert in technology and corporate governance. Today, we’re diving into the recent salary increase of Microsoft CEO, Satya Nadella, and the implications behind it. Dr. Mukherjee, thanks for being here!
Dr. Mukherjee: Thank you for having me! I’m excited to discuss this significant development in the tech industry.
Editor: Let’s dive right in. Satya Nadella’s salary has skyrocketed by 63%, bringing it to approximately $7.91 crore for the financial year 2024. What do you think are the main factors contributing to such a substantial increase?
Dr. Mukherjee: There are several factors at play here. Firstly, the growth of Microsoft’s stock value has been tremendous over the past year. Increases in stock awards are often tied to the overall performance of the company, and it seems that Nadella’s leadership has been pivotal in driving Microsoft’s growth in areas like cloud computing and AI.
Editor: Absolutely! It’s interesting to note that Nadella’s stock awards have increased from $39 million to $71 million. Do you see this as a trend among tech CEOs where stock awards are prioritized over cash compensation?
Dr. Mukherjee: Yes, definitely. Many tech companies now favor stock options to align the interests of executives with those of shareholders. By boosting stock awards, companies encourage CEOs to focus on long-term growth and stability, which can ultimately benefit shareholders. However, this shift also raises questions about the sustainability of these rewards if companies face market fluctuations.
Editor: That’s a great point! What stands out in this SEC filing is that despite the hefty raise, Nadella requested a reduction in his cash compensation. He cited cybersecurity concerns for this decision. What might he be indicating with this move?
Dr. Mukherjee: Nadella’s request for a pay cut in cash compensation can be seen as a sign of responsibility and caution. Cybersecurity is a pressing issue for tech companies today, and his decision might reflect an understanding of the growing risks that face corporate leaders in the digital landscape. By lowering his cash take-home pay, he might be signaling to investors that he prioritizes the company’s security and long-term integrity over immediate financial gain.
Editor: That’s a fascinating perspective. Furthermore, Nadella hinted at a possible ‘China angle’ related to his decision. How do you see geopolitical tensions influencing corporate strategies, especially in tech?
Dr. Mukherjee: Geopolitical dynamics, particularly concerning China, play a crucial role in the tech industry. Companies are increasingly scrutinizing their operations and stock exposure in light of global relations. By addressing cybersecurity and hinting at the geopolitical angle, Nadella is likely being cautious about potential risks that could arise from international relations, particularly regarding data security and regulatory compliance.
Editor: As we consider the future, what steps should tech executives like Nadella take to navigate both growth and potential risks in the marketplace?
Dr. Mukherjee: CEOs must strike a delicate balance between encouraging innovation and mitigating risks. This involves investing in robust cybersecurity measures, embracing transparent governance, and maintaining open lines of communication with stakeholders. Additionally, understanding and adapting to the geopolitical landscape will be crucial for ensuring the company remains resilient and competitive.
Editor: Thank you so much, Dr. Mukherjee, for your insights today! It’s clear that Satya Nadella’s decisions aren’t just about personal financial gain but reflect a broader strategy that takes into account the complexities of the tech landscape and global affairs.
Dr. Mukherjee: Thank you for having me! It’s always a pleasure to discuss the changes shaping our industry.
Editor: And thank you to our audience for tuning in! Stay with us for more discussions on current trends and developments in technology and business.