Microsoft's shareholders on Wednesday approved CEO Satya Nadella's multimillion-dollar pay package but by a margin much smaller than similar votes in the past.
Last month, Institutional Shareholder Services, the institutional investment adviser, urged its clients to vote against Nadella's compensation, calling a February stock grant given to him a "mega equity award" and arguing that the award "lacks a strong connection to objectively measured company performance."
Nadella was appointed CEO in early February, replacing Steve Ballmer, who had abruptly announced his retirement in August 2013.
After tallying the shareholder votes, Microsoft said that 2014's executive pay proposal passed with the "ayes" accounting for 72% of those cast.
While that would be a landslide in any political election, it was much lower than previous votes by Microsoft's shareholders. In 2013, the then-proposed executive compensation plan was approved by 97% of the votes, while in 2012 and 2011 the numbers were 94% and 98%, respectively.
The votes were nonbinding in each case, giving Microsoft's board ultimate authority whether to impose the pay packages if shareholders had rejected them.
For Microsoft's fiscal 2014, which ended June 30, Nadella received nearly $919,000 in salary, $3.6 million as a cash bonus, and approximately $65 million in stock awards that vest over multiple years and in some cases will be tied to Microsoft's market performance, according to earlier filings with the U.S. Securities and Exchange Commission (SEC).
ISS estimated that Nadella's 2014 compensation totaled $90.8 million.
The big difference between 2014 and the stretch from 2011 to 2013 -- and prior years -- was that Nadella did not have a major equity stake in the company, as had his predecessors Ballmer and co-founder Bill Gates. Each of those men still hold billions in Microsoft stock.
Microsoft made that point in its pitch to shareholders this fall.
"Until the appointment of Mr. Nadella, the compensation structure for our CEO differed significantly from those of almost every major global company. Neither Mr. Gates nor Mr. Ballmer received any equity incentive compensation given the intrinsic alignment with shareholders and the wealth-building opportunity their existing Microsoft shares afforded," the firm's proxy statement read.
Other business items concluded at the shareholder meeting included the election of 10 board members, three of them new faces. Each of the directors received a vote greater than 92% of those cast.
The three newly elected directors are Teri List-Stoll, chief financial officer for Kraft Foods Group; Charles Scharf, Visa's CEO; and John Stanton, chairman of Trilogy Equity Partners, a venture capitalist firm that invests in wireless startups. They were added to the board this summer and fall after Ballmer resigned from his directorship, severing his last official tie to the company, and after two others, longstanding members Dina Dublon and David Marquardt, said that they would not run for re-election.