Microsoft CEO Takes Pay Cut After Security Breaches

Microsoft's CEO, Satya Nadella, saw a significant pay increase for the fiscal year 2024, reaching $79. 1 million. However, this amount was $5. 5 million less than it could have been due to several cybersecurity incidents. Nadella's compensation was mainly in the form of stock. The board's compensation committee noted that Nadella requested a reduction in his cash incentives to reflect the security issues. This request followed a report from the U. S. Department of Homeland Security in April, which highlighted a breach by China of U. S. government officials' email accounts. Microsoft had disclosed this incident in July 2023. Earlier, in January of the same year, Microsoft revealed that Russian intelligence had accessed some of its top executives' email accounts.In response to these security breaches, Microsoft announced it would improve its practices. The government report suggested that "customers would benefit from its CEO and board of directors directly focusing on the company's security culture. " Nadella addressed this concern in a memo to employees in May, emphasizing that Microsoft would prioritize security above all else. In June, the company announced that employees' cybersecurity efforts would be considered in their compensation. The cash incentive portion of Nadella's pay is primarily based on the company's performance regarding revenue and operating income targets. Initially set at $10. 66 million, the full board approved a reduced cash incentive of $5. 2 million. Nadella agreed that Microsoft's performance was strong but felt that the pay should reflect his personal commitment to security. Microsoft's security business generated over $20 billion in revenue in 2022, a substantial amount compared to many security companies' total revenue.