Microsoft promises Nadella up to $18M for fiscal year 2015
Gets big raise to go along with the big promotion to CEO
Computerworld - Microsoft this week set Satya Nadella's annual base salary at $1.2 million, nearly twice his predecessor's but right on the average of CEOs in the technology industry, an executive compensation expert said today.
"His base salary is pretty much right on market," said Bob Buford, a Portland, Ore.-based compensation consultant. "If you look at their peer companies, those in technology average $1.2 million, while those in what they call the 'Dow 30' peer group is about $1.4 million."
The technology firms that Microsoft uses for compensation comparison purposes include Amazon, Apple, Dell, Google, IBM, Intel and others. The out-of-industry group includes American Express, Coca-Cola, ExxonMobil, Pfizer, Wal-Mart and 20 other American corporations, according to a filing with the U.S. Securities & Exchange commission last October.
"Microsoft is playing it safe, but certainly placing more emphasis on cash, but that's understandable for a guy who has far less equity than Ballmer," said Buford.
Former CEO Steve Ballmer's annual salary was $697,500, or 42% less than Nadella's. Ballmer, however, hardly needed the money, since he's one of the world's richest, with an estimated net worth of $15.2 billion, most of it in Microsoft stock, according to Forbes.
Nadella's previous salary as head of Microsoft's cloud-computing division was $669,167; he got a big bump -- a 79% increase -- with the promotion to CEO. His total compensation package for the 2015 fiscal year, which starts July 1, could be as much as $18 million, or 144% higher than the $7.6 million he received in fiscal 2013.
On Tuesday Microsoft named Nadella, 46, as its third-ever CEO, replacing Ballmer, who last year announced he would retire. Ballmer may not have been fired, but he was certainly pushed out, analysts have said, because he was either not unwilling or unable to accelerate changes at the Redmond, Wash. company. Microsoft faces an historic downturn in new PC sales and struggles in the now-booming mobile device and services markets.
Last year, Microsoft's board reduced Ballmer's bonus, citing the poor performance of Windows 8 and the $900 million Surface RT write-off. It was the second year running that the board paid Ballmer less than the maximum bonus he could have earned.
Like all the top executives at Microsoft, Nadella is eligible for a bonus. The bonus, paid in cash rather than stock, can be as high as 300% of his base salary, or $3.6 million in fiscal year 2015.
For the remainder of fiscal year 2014, Nadella would be paid up to three times as much as his CEO salary was between Feb. 4 and June 30.
- Microsoft plans to patch critical under-attack IE bug next week
- Ballmer regrets not aping Apple sooner
- OS upgrades: Cheap is better than pricey, free is better than cheap
- Update: More top-tier Microsoft execs head for the door
- Microsoft ships Office 2013 SP1 the old-fashioned way
- Microsoft's 'go-low' play puts Windows revenue on the line
- Microsoft: Android Nokia not our call to make
- Gates sells another 20M shares; lead over Ballmer shrinks to nearly nothing
- Hey Microsoft, where's the next Mac Office?
- Microsoft dubs 'confusing' Office Web Apps as Office Online
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Future Focus: What's Coming in Enterprise Mobility Management (EMM) Find out why Enterprise Mobility Management (EMM) solutions that are truly future-ready must be designed to enable Machine-to-Machine (M2M) capabilities and much more.
- The CIO's Guide to Enterprise Mobility Management (EMM) This guide will help those making an EMM platform decision make the best choice for their organization.
- Yankee Group: BlackBerry Results Refute Rumors of its Demise Yankee Group: BlackBerry® is stronger than the press makes it out to be.
- Your New EMM Platform: How to Streamline the Migration Smartphone migration can be resource-intensive and challenging. Find out how outsourcing the process can save significant time and money.
- Live Webcast Increasing the Value of Your Reports and Dashboards Learn how incorporating other analytical capabilities such as predictive modeling and visualization can increase the value of your reports and dashboards by providing...
- Testimonial: Cystic Fibrosis Trust Peter Hawkins, the Head of IT for Cystic Fibrosis Trust, discusses the role CommVault's Simpana software platform plays in improving the company's information...
- Increasing the Value of Your Reports and Dashboards Learn how incorporating other analytical capabilities such as predictive modeling and visualization can increase the value of your reports and dashboards by providing... All Management White Papers | Webcasts