Microsoft CEO Satya Nadella and other executives take a big hit to compensation

News
By Colton Stradling
published

Missing financial targets have led to Microsoft's C-suite's compensation decreasing year over year.

Satya Nadella looking sad with raining money
(Image credit: Windows Central)

What you need to know

  • Satya Nadella's 2023 compensation was $48,512,537 down from 2022's $54,946,310 compensation. 
  • Other C-suite members were hit even harder like Amy Hood and Brad Smith losing between 22-24%. 
  • The compensation amount for Satya Nadella is still 250-1 for the CEO-to-employee pay ratio. 

Every year Microsoft is required to submit a regulatory filing that includes compensation for its CEO and other top executives. In the most recent regulatory filing for fiscal year 2023 submitted by Microsoft, we are able to see that Microsoft's C-suite has had a substantial reduction in its compensation over fiscal year 2022. This was mostly due to the company missing several of its financial targets for the year. We have a breakdown of the compensation numbers and what it means on a larger scale.

How much does Microsoft CEO Satya Nadella make?

Microsoft CEO Satya Nadella made $48,512,537 down from $54,946,310 the prior year an astounding 250 to 1 ratio compared to the average Microsoft employee. Speaking of the average Microsoft employee, we recently reported on the new hire salary for several Microsoft positions. The other executives named in the filing document also had substantial decreases in their compensation. 

  • Satya Nadella FY2023 compensation - $48,512,537, FY2022 - $54,946,310, FY2021 - $49,858,280
  • Amy Hood FY2023 compensation - $19,902,897, FY2022 - $26,466,141, FY2021 - $23,466,141
  • Judson Althoff FY2023 compensation - $16,204,718 FY2022 - $18,848,998, FY2021 - N/A
  • Bradford Smith FY2023 compensation - $18,115,690 FY2022 - $23,408,739, FY2021 - $20,455,896
  • Christopher Young FY2023 compensation - $9,815,914 FY2022 - $11,270,458, FY2021 - $28,495,083

Satya Nadella lost 11.2% over last year, Amy Hood is down 24.4%, and Brad Smith 22.6% over their fiscal year 2022 compensation, and this is being caused by the company missing some of its financial goals. We have a breakdown of some of the raw numbers as well as an image of the table from the filing document for those interested.

Image of Microsoft Executives compensation for Fiscal Year 2023

The Fiscal Year 2023 compensation tables show the top 5 Microsoft executives compensation over the last 3 years.. (Image credit: Microsoft)

Why are so many companies having layoffs?

As the globe is still struggling to deal with record inflation and a shifting landscape with so many companies going to work from home or returning back to the office, these types of compensation reports highlight what many people have been criticizing for years. On the heels of Microsoft announcing they will lay off 10,000 employees it's hard to not feel a sense of injustice when hearing the inordinate amount of compensation that a few people in Microsoft's upper echelon are earning. It's hard not to think how many people's positions could have been saved if these 5 people had offered to reduce their compensation low enough to cover the normal cost of living in their area and offer the rest to keep as many employees as possible.

Companies around the globe are suffering to handle reduced profits even as revenue grows year over year. The increased cost of energy, fuel, supplies, and raw materials as inflation rages rampant has destroyed profit margins and left many companies with the decision to raise prices or lay off employees. Many companies are raising the prices of their goods and services, but many are laying off substantial amounts of employees to keep profits viable. LinkedIn recently announced layoffs and there isn't a week that goes by where there isn't a Fortune 500 company or small to mid-sized company that has layoffs as well, especially in the video-game development scene. 

Take a look at just a few of the companies that have had layoffs this year alone that we have covered at WindowsCentral.

Ultimately, the reason for these compensation decreases is because Microsoft isn't meeting its financial goals, and if profits aren't kept at an acceptable margin Satya Nadella will be replaced by the shareholders. He and the rest of the C-suite are incentivized through their compensation programs to improve profits and hopefully, they can do that by innovating and finding growth avenues rather than continuing layoffs and cost-cutting that could lead to more closures of divisions and product lines as we have seen with some of the Surface devices.

Microsoft has two shining rays of hope that could help launch the company into a growth period like they haven't seen in decades. As we reported, Microsoft and Xbox have a huge opportunity with the close of the Activision Blizzard King acquisition to really make a move in the massive mobile market. Also, Microsoft recently invested Billions of dollars into OpenAI and has completely pivoted to an AI-focused company with Copilot announced and heading to Windows 11 soon. If these executives aren't willing to take substantial pay cuts, they should focus on driving revenue and profits through methods that don't involve layoffs or removing offerings from the market such as we often see with Microsoft and Google. 

Do you think CEOs make too much money? How is Microsoft's future looking? Let us know in the comments. 

Colton Stradling
Colton Stradling
Contributor

Colton is a seasoned cybersecurity professional that wants to share his love of technology with the Windows Central audience. When he isn’t assisting in defending companies from the newest zero-days or sharing his thoughts through his articles, he loves to spend time with his family and play video games on PC and Xbox. Colton focuses on buying guides, PCs, and devices and is always happy to have a conversation about emerging tech and gaming news. 

5 Comments Comment from the forums
  • naddy69
    "Why are so many companies having layoffs?"

    Because so many companies have too many employees for current market conditions. This ain't rocket science.

    "It's hard not to think how many people's positions could have been saved if these 5 people had offered to reduce their compensation low enough to cover the normal cost of living in their area and offer the rest to keep as many employees as possible."

    Why should they do that? While that sounds really noble, the fact is no one wants to take a huge pay cut to "help other people".

    I have news for you. To a homeless person, YOU are "wealthy". Why don't you "offer to reduce your compensation low enough to cover the normal cost of living in your area" and give the rest to homeless people?

    Not so easy, is it?

    Top management at trillion dollar companies make lots of money for a reason: Very few people can do the job. If everyone could throw a 60 yard pass to a guy running down the sideline and score a touchdown, then NFL quarterbacks would be a dime a dozen.

    This is how it's supposed to work. You can get paid whatever the market will bear. Not what some committee somewhere deems "fair".

    Supply and demand. The market in action. Economics 101.
    Reply
  • Jcmg62
    That is not OK.

    How is this poor guy going to make it through an entire year on just $4800000.

    This is seriously going to impact on his plans to buy more helicopters, extend his 500 acre holiday ranch and add a couple of bugattis to his collection.

    If I were him I'd quit. Clearly Microsoft are dissing him.
    Reply
  • The Werewolf
    "Satya Nadella's 2023 compensation was $48,512,537 down from 2022's $54,946,310 compensation."

    Man, I know how he feels. I mean, how can anyone live on a measly $48M a year? /s
    Reply
  • The Werewolf
    naddy69 said:
    "Why are so many companies having layoffs?"

    Because so many companies have too many employees for current market conditions. This ain't rocket science.

    "It's hard not to think how many people's positions could have been saved if these 5 people had offered to reduce their compensation low enough to cover the normal cost of living in their area and offer the rest to keep as many employees as possible."

    Why should they do that? While that sounds really noble, the fact is no one wants to take a huge pay cut to "help other people".

    I have news for you. To a homeless person, YOU are "wealthy". Why don't you "offer to reduce your compensation low enough to cover the normal cost of living in your area" and give the rest to homeless people?

    Not so easy, is it?

    Top management at trillion dollar companies make lots of money for a reason: Very few people can do the job. If everyone could throw a 60 yard pass to a guy running down the sideline and score a touchdown, then NFL quarterbacks would be a dime a dozen.

    This is how it's supposed to work. You can get paid whatever the market will bear. Not what some committee somewhere deems "fair".

    Supply and demand. The market in action. Economics 101.
    Here's the problem with your analysis: a market has two parts - producers and consumers. Consumers are generally funded by jobs. When they don't have jobs, they can't be consumers anymore. Even with jobs, the max price for what they can buy is dependent on their income level.

    We literally went through this in the 1920s (ironically) when the first major wave of automation came in and businesses used your logic to maximise profit by removing workers. It was seriously believed at the time that if businesses could lower their prices even unemployed people could still buy their products - the original 'supply-side economics' - and remember this was an era with essentially no social support system like unemployment or welfare. That (along with other factors) caused a run on banks... at the same time, a massive reduction in purchasing of goods and services.

    Which led to 1929 and start of the Great Depression.

    Consumers, ie: workers, are as important as businesses.

    Those who do not learn from history, as they say...
    Reply
  • fenouille
    Employees are already pretty ticked off about layoffs, pay freeze, hiring freeze (meaning longer work hours to keep up). Whether it's due to the mechanics of the executive pay per incentive or not, it's the bare minimum that their pay gets reduced in the face of hardship of the regular (or former) employees. Significant amount of tech employees is on temp visa, and when laid off their entire families needed to promptly find a new job or leave the states. Yes, that does mean kids pulled out of school and flown away to a country 'of origin' they barely know. If you check Satya's origin story, he should have first-hand experience of that.
    The comment about the need for executives to further optimize the organization for short term profit maximization is widely off the mark. This kind of thinking has driven so many companies to abhorrent culture which in the long term hurts the company's viability. On the contrary, a more conservative hiring at Microsoft during the Covid era led to less severe job cuts, yet still these cuts are going to be felt in the ability of the company to execute on its objectives (product delays, support quality dip, service reliability drop, regional data centers postponed).
    Reply