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Microsoft's CEO Got A Huge Pay Increase, Here's How Much Money He Makes

Big pay.

24 Comments

Microsoft CEO Satya Nadella received a big pay increase for the latest fiscal year. The executive was paid $42.9 million--including his salary and stock options--for the latest fiscal year that ended on June 30. That is a big increase (66 percent) from the previous year.

All of this information was posted publicly in Microsoft's latest annual proxy statement filed with the United States Securities & Exchange Commission and reported on by CNBC.

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As CNBC reminds us, Nadella earned $84.3 million during the fiscal year 2014, which was when he took on the role of CEO following Steve Ballmer.

Nadella's base salary went up by $1 million to $2.5 million for the latest fiscal year, while his stock awards also improved. Explaining the increases to Nadella's overall pay package, Microsoft said, "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."

Microsoft's proxy statement explains that it determines pay scales for its executive officers in an effort to "attract, motivate, and retain the key executives who drive our success and industry leadership while considering individual and Company performance and alignment with the long-term interests of our shareholders."

When determining pay rates, Microsoft's executive compensation committee looks into a number of factors, including third-party compensation surveys and public data from other, similar companies. Additionally, pay is determined by role and responsibility.

Executives can also receive performance-based bonuses, with different business categories weighted differently, seemingly as a method to motivate executives to hit certain milestones. Given that Nadella's base salary is $2.5 million, he earns most of his money from stock rewards and other bonuses.

Nadella's increased pay package comes amid booming business for Microsoft. In 2018, the company temporarily overtook Apple to become the highest-valued pubic company on Earth. Microsoft became a trillion-dollar company in April, and the valuation has stayed that high throughout the year.

Xbox hardware sales are slowing down, but things might turn around in the next year as the company is expected to release a next-generation console with Halo Infinite as a launch title in Holiday 2020.

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MattWoahYeah

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Afghanistan is low in income inequality. Does that mean their people are better off? Does that mean there's less poverty? Does that mean they have higher paying jobs inflation adjusted? No, no, and no.

Income inequality isn't a real issue. It has zero correlation with relative rate of poverty. It's just a tool that politicians use to manipulate envious people into getting their votes.

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DAOWAce

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Meanwhile, the top 1% has 32x more money than the bottom 50% of Americans.

#capitalism

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MattWoahYeah

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@DAOWAce: Nobody is rich because somebody else is poor. If anything, we benefit from it.

Income inequality is really low in Afghanistan. You might like it there.

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velite

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GameSpot loves their crappy clickbait articles. Just look at the awful title, that's not journalism, that's "CLICK ME SO WE GET AD REVENUE." Fewer people would care if the title was "Microsoft CEO Earns $2.5 Million Plus Stock Options." Outrage fuels the journalism industry and that's why you see "here's what you need to know" articles. Let's not remind readers of the huge tax penalties he'd be paying if he got much more than his $2.5 million, that doesn't boost outrage.

Ever wonder why CEOs get paid in stock options? It's because they're basically forced to work hard to maintain the value of the stock. If the CEO performs poorly in the future, value is lost. If the company goes out of business, the stock becomes worthless. Let's also not forget the demand for good CEOs and the impact a good or bad CEO has on the livelihoods of the many workers. CEOs require years of specialized training and hard work that most people aren't willing to undergo.

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RestatBonfire

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I never understood how a job could pay that much.. there's no maximum wage but there's a minimum. Logic.

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MattWoahYeah

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Edited By MattWoahYeah

There is a strong argument to be made that many of these executives are underpaid. Keep in mind their compensation is often composed of 90%+ equity in the company, which is not liquid for several years or upon meeting certain benchmarks. There's nothing wrong with giving a CEO partial ownership in a company that he/she directly grew.

Larry Kulp from GE is a good example of a Fortune 500 executive that deserves to make more. That guy came into a failing business and stabilized it. He saved hundreds of thousands of pensions. GE wouldn't exist today if anybody else in the world but him was their leader. That's huge. You can't pay somebody like that enough. If it wasn't for him, all the 99%ers working there would be unemployed. The fact that he's wealthy is not hurting anybody.

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Atzenkiller

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@restatbonfire: Because nobody is entitled to get payed any specifc sum. If there were no labor unions most people would still be starving, similar to how things were before the government and labor unions stepped in to demand better pay for simple workers.

But in the business world you get payed for performance. So if you can generate billions of $ for a company, then you can also expect to get a nice share of those profits. And if a company doesn't pay enough, then someone else will. But this is how capitalism works. Supply and demand. Getting payed nice wages for doing the same work as millions of others is something our society has created artificially. In the real world your value, what you have to offer to others decides your income.

And I'm not saying that being hell bent on increasing profits for your company at any cost is the way to go. But if you do a shitty job or provide nothing that no one else doesn't already, then why would you expect to get payed more than the bare minimum? And the business world is ruled by money, so if you tried to create the best products possible instead of aiming for max profits, then you'd probably be replaced very quickly.

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Batman90

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@restatbonfire: cause he works longer and harder then all the other employees. While they have set hours he’s on call 24/7. Do you expect him to run a International company for minimum wage?

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Chubby170

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@restatbonfire: Well, the company made 100 billion last year and this guy runs the show. Seems logical to me.

Workers are paid by their skill set and what they can attribute to the company, and a companies goal is to maximize profits.

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Chubby170

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Good for him! Everyone wishes they could have that...

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Gamerforlife96

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@chubby170: me I wish that :(

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juiceair

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Meanwhile the janitor who cleans his office...tree fiddy an hour.

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Batman90

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@juiceair: unlike the janitor I bet the CEO is on call 24/7 and works longer and his job is more difficult. Janitors for companies like Microsoft are independent contractors and the bid on it.

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DaVillain

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DaVillain  Moderator

Now that's enough money to buy yourself a new life.

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Litchie

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Good. This way he'll be able to have those four mansions he needs. Nice job, MS.

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Cherub1000

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Holy cow? Makes an absolute joke of the rest of us who have to put foot to ass to have food on the table!

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Greylock3491

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No one is worth 42 million a year.

Imagine the great new products they could release if the put that money towards R&D and MFG, instead of the leadership at MS bribing each other to make the stock go up.

Sad.

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Chubby170

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@Greylock3491: Lol, Microsoft made 100 billion last year. 42 million for the top exec salary isnt even a dent.

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deactivated-5f1fd545a935b

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@Greylock3491: @Greylock3491: they do ... waaaaaaaaaaaaay more than 42 million a year and that's not even scratching the surface, specially within the R&D department. Also worth noting that Microsoft is one of the most giving companies out there. If you want to start a tech business you can easily enter the Microsoft Start-Up programme and get funded with U$25K Azure credit plus other free licenses. The number may seem really big , but you have to consider things within context and within their adequate proportions. This is well deserved, he has turned Microsoft around hugely in the last years in more ways than just tech.

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Fround

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im sorry but no shit, its the CEO of Microsoft.

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DEVILTAZ35

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How much pay someone receives is not gaming news please stick to actual stories about games.

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malachi

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@deviltaz35:

Better than unrelated gaming news such as wrestling taking up all of the homepage.......on a gaming site!?!?!

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deactivated-5e79aaefd0bf5

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@deviltaz35: I dunno, I like being informed about gaming industry news. You can always ignore the article if it doesn't interest you.

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DaVillain

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@bluzima: (Like)

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