Report: Microsoft set to 'nearly double' its employee compensation budget

Microsoft CEO Satya Nadella smiling
Microsoft CEO Satya Nadella smiling (Image credit: Microsoft)

They call it the "Great Resignation," with millions of employees from all walks of life re-assessing their relationship with work in a post-pandemic era. Whether it's a desire to permanently work from home, or simply find greener pastures, employee turn over has ramped up across the working world, and Microsoft is no different.

Doubtless in response to the current labor market, Microsoft today announced it will nearly double its budget for merit-based employee pay increases, while also increasing its annual stock options by 25%. The plans were detailed in an internal email from CEO Satya Nadella (via Geekwire), and outline a range of measures to retain staff in a volatile labor market.

"Time and time again, we see that our talent is in high demand, because of the amazing work you do to empower our customers and partners. Across the leadership team, your impact is both recognized and deeply appreciated — and for that I want to say a big thank you. That's why we're making long-term investments in each of you.""Specifically, we are nearly doubling the global merit budget. Merit budgets will vary by country, based on local market data, and the most meaningful increases will be focused where the market demands and on early to mid-career levels. We are also increasing Annual Stock ranges by at least 25 percent for all levels 67 and below."

According to the report, "Level 67" refers specifically to senior managers and everyone below. General managers, execs, VPs, and CVPs won't be included in the budget. Amazon and other tech companies have made similar moves in recent months, as the demand for engineers, developers, and other tech positions becomes more competitive.

I've spoken to former Microsoft employees who recently left the company throughout the pandemic, and many specifically cited seeking higher pay and improved benefits from some of Redmond's competitors. Microsoft is hiring hundreds of staff practically around the clock, as it seeks to grow Azure, Xbox, and its other platforms. This move from Nadella will work towards improving Microsoft's ability to attract and retain staff.

Indeed, Microsoft has taken home "Global Best Place to Work" awards in the past, and is ranked among the top companies on work review site Glassdoor. As the face of work evolves in a post-pandemic era, Microsoft will have to stay on its toes to keep up with its competitors.

Thanks @HazzadorGamin for the tip!

Jez Corden
Co-Managing Editor

Jez Corden is a Managing Editor at Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by tea. Follow on Twitter @JezCorden and listen to his XB2 Podcast, all about, you guessed it, Xbox!