Microsoft CEO Satya Nadella asked for a pay cut after cyberattacks

Microsoft (MSFT) CEO Satya Nadella earned a 63% pay increase in the last fiscal year thanks to the company’s excellent financial performance. I could have made millions more if it hadn’t been for a number of cybersecurity breaches at the technology giant.

Given Microsoft’s strong performance during the fiscal year ending June 30, Nadella received a total of $79.1 million for the fiscal year ending June 30, up from $48.5 million in 2023. , Microsoft revealed in a regulatory filing Thursday.

This is primarily made up of stock awards worth $50 million. Nadella also received a cash incentive of $5.2 million, less than half of what he would have received based solely on the company’s financial and operational performance during the fiscal year.

“Mr. Nadella agreed that the Company’s performance was extremely strong, but reflecting on his personal commitment to safety and his role as CEO, he asked the Board to consider deviating from established performance metrics and reducing his incentive in cash to reflect his personal responsibility for the approach and “The speed required for the changes that the current cybersecurity threat landscape demonstrated were necessary,” the compensation committee wrote in a letter to shareholders.

Microsoft was the target of a series of main cyberattack campaigns in 2023 and early 2024. In April, the US Cyber ​​Security Review Board (CSRB) found that Chinese hackers known as Storm-558 compromised Microsoft Exchange Online emails from 22 organizations and more than 500 people around the worldincluding senior US government officials working in national security.

He reportpublished by the US Department of Homeland Security (DHS), found that the attack was “preventable” and that a series of operational and strategic decisions by Microsoft led to “a corporate culture that deprioritized investments in enterprise security and a Rigorous risk management.

In January of this year, Microsoft’s corporate email systems were attacked by Midnight Blizzard, a Russian state-sponsored actor. The company said in March that it could see evidence of the hackers. use stolen information to gain access to their “source code repositories and internal systems.” Microsoft said it had seen no evidence that its customer support systems were compromised.

For fiscal year 2025, the committee said it added a new performance category based on cybersecurity responsibility. It also enhanced its executive compensation program to reflect leadership’s focus on the company’s AI goals.

More than 95% of Nadella’s compensation is performance-based, and typically 70% of the annual cash incentive is tied to achieving pre-established financial goals. Last year, Microsoft shareholder returns totaled 32%, which meant Nadella was eligible for a payout of more than 138% as a percentage of the company’s target.

—Britney Nguyen contributed to this article.

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