The total compensation for Satya Nadella, the CEO and chairman of Microsoft, has surged to $96.5 million for the fiscal year 2025. This represents an increase of nearly 22 percent compared to the previous year. Nadella”s compensation package includes a base salary of $2.5 million, which has remained steady since 2023, $84 million in stock awards, $9.5 million in a non-equity incentive plan, and $196,000 categorized as other compensation.
Despite previously expressing concerns about job cuts at Microsoft, Nadella”s financial rewards appear substantial. Microsoft justified this increase to shareholders in its Proxy Statement, highlighting the company”s impressive growth since he took the helm in 2014. Under his leadership, Microsoft has tripled its revenue, quadrupled its net income, and quintupled its diluted earnings per share.
For the fiscal year ending June 30, Microsoft reported total sales of $281.7 billion, a net profit of $101.8 billion, and earnings per share of $13.64. Every division experienced double-digit revenue growth, with the exception of LinkedIn, which saw a decline, and Windows OEM and Devices, which grew by 3 percent.
Microsoft emphasized the importance of linking Nadella”s pay to the company”s stock performance, which has doubled in value over the past three years due to rising expectations surrounding artificial intelligence. The company stated, “In accordance with this view and in contrast to standard market practice, Mr. Nadella”s equity compensation is delivered exclusively through performance stock awards tied to long-term value creation and does not include any time-based equity awards.” In fact, over 95 percent of Nadella”s total target compensation is performance-based, with the target performance stock award set at $50 million for fiscal year 2025, unchanged since fiscal year 2022.
Other financial highlights from Microsoft”s recent fiscal year include Azure revenue exceeding $75 billion, which represents a year-over-year increase of 34 percent. The company now operates in 70 regions and has over 400 data centers, with an additional two gigawatts of capacity added in fiscal year 2025. The company also reported having 430 million commercial paid seats for Microsoft 365 and 89 million consumer subscribers, along with 1.2 billion LinkedIn members. Additionally, 230,000 organizations have utilized Copilot Studio, and the Azure AI Foundry agent service has 14,000 customers. Advertising revenue has reached $20 billion annually.
Other executives at Microsoft also received significant compensation. Chief Financial Officer Amy Hood earned $29.5 million, while Judson Althoff, the executive vice president and CEO of Microsoft Commercial, received $28.2 million. Takeshi Numoto, executive vice president and chief marketing officer, was awarded $11.87 million. Meanwhile, the median pay for the remaining workforce, following layoffs in July that affected up to 9,000 employees, stood at $200,972. This resulted in a staggering compensation ratio of 480 to 1 between Nadella”s total annual compensation and that of the median employee.
