Reports indicate that Microsoft may lift the freeze on specific employee salaries while emphasizing 'more' accountability for top executives

Microsoft employees throwing cash in the air
(Image credit: Windows Central | Kevin Okemwa)

What you need to know

  • Microsoft could potentially end its salary freeze for some employees.
  • The Redmond giant stopped raising salaries for full-time staff last year due to tough economic times.
  • The salary freeze sparked mixed feelings among most employees, who started questioning the company's leadership.
  • The decision negatively impacted some of the employees' performance and morale.

Last year, Microsoft CEO Satya Nadella informed the company's full-time staffers they wouldn't get a salary raise. The CEO blamed tough economic times, further indicating that it was a difficult decision under consideration for several months.

But as it now seems, the company is over the hump. According to a spot by Business Insider, Microsoft executive vice president of cloud and AI Scott Guthrie indicated that merit raises are set to increase this year while at an employee meeting. For context, Microsoft refers to performance-based raises as merit increases. 

In 2023, top Microsoft executives, including Satya Nadella and Brad Smith, received major pay cuts after missing financial targets. For instance, Satya Nadella's 2023 compensation was $48,512,537, down from 2022's $54,946,310, while other C-suite members, like Amy Hood and Brad Smith, were hit even harder, losing 22-24%. 

Microsoft seems to be on an upward trajectory. Recently, it ranked as the world's most valuable company, with over $3 trillion in market capitalization. This has placed it in front of Apple, with market analysts predicting that the tech giant is on the brink of reaching its iPhone moment with AI.

Per Business Insider's report, Microsoft began its annual review with a performance review last month. Microsoft employees will reportedly receive notifications about how their performance index affects compensation rates in August. Payouts will be made late in September.

Microsoft employees expressed concern over the company's leadership

Shortly after the memo leaked indicating that Microsoft's full-time staff weren't getting a salary raise, some employees started expressing concern about the company's leadership. The company's decision to cut 10,000 jobs by the end of FY23 Q3 was also a contributing factor.

In a leaked poll, less than half of Microsoft employees are willing to retain their positions at the company if they get another offer elsewhere. The employees further disclosed the lack of a raise negatively impacted their performance index and morale at work. Microsoft posted an impressive earnings report for FY24 Q3 with a 17% increase in revenue; as such, there's a likelihood that employees will benefit, too.

As it happens, Microsoft is shifting its focus to cybersecurity and has put elaborate measures in place to help remedy its "cascade of security failures." Perhaps the most intriguing one is that it'll now hold top company officials accountable for cybersecurity by tying a portion of their compensation packages to meeting security goals and metrics.

Kevin Okemwa

Kevin Okemwa is a seasoned tech journalist based in Nairobi, Kenya with lots of experience covering the latest trends and developments in the industry. With a passion for innovation and a keen eye for detail, he has written for leading publications such as OnMSFT, MakeUseOf, and Windows Report, providing insightful analysis and breaking news on everything revolving around the Microsoft ecosystem. While AFK and not busy following the ever-emerging trends in tech, you can find him exploring the world or listening to music.