Microsoft CEO Satya Nadella received a substantial pay rise for the 2024 fiscal year despite requesting a reduction in his pay due to cybersecurity breaches.
Nadella’s total pay rose 63 percent to $79.1 million. This is up from $48.5 million in the previous fiscal year, according to Microsoft’s latest proxy filing.
Request for Reduction Amid Security Breaches
The increase in Nadella’s compensation primarily came from stock award. However, his total pay could have been $5.5 million higher if he hadn’t asked to reduce his cash incentive portion.
This decision followed a series of high-profile cybersecurity incidents involving the company.
In April, the US Department of Homeland Security released an independent review of a breach in which Chinese hackers accessed the email accounts of government officials. Microsoft disclosed the incident in July 2023.
Earlier in January, Microsoft reported another security lapse involving Russian intelligence, which had infiltrated the email accounts of some of the company’s top executives.
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Nadella’s Commitment to Security
Nadella took personal responsibility for the company’s security focus and performance.
He told the board’s compensation committee to reduce his cash incentive as a reflection of his accountability for addressing these cybersecurity lapses.
As a result, Nadella’s cash incentive was cut to $5.2 million from a planned $10.66 million.
The board agreed, emphasizing Nadella’s commitment to the company’s security culture and speed of response.
In a memo to employees in May, Nadella stressed the importance of prioritizing security above all else and mentioned that Microsoft would tie employee compensation to cybersecurity performance.
A Lucrative Security Business
Despite these setbacks, Microsoft’s security business remains a significant revenue generator, bringing in over $20 billion in 2022, surpassing the total revenue of many dedicated cybersecurity companies.
Nadella’s focus on enhancing Microsoft’s security culture comes at a time when global cyber threats are escalating and the company is refining its strategies to meet these new challenges.
