Microsoft CEO Satya Nadella has experienced a substantial increase in his pay for fiscal 2025, which highlights the company’s remarkable achievements during the artificial intelligence boom. A recent proxy statement from Microsoft, released on Tuesday, revealed that Nadella’s total compensation rose by 22 percent to $96.5 million (₹847.31 crore), up from $79.1 million in the prior year. This increase illustrates the close connection between Nadella’s earnings and Microsoft’s rising stock prices and AI-driven growth. A significant portion of his compensation, over $84 million, was derived from stock awards, directly linking his financial success to Microsoft’s market performance. Additionally, he received $9.5 million in cash incentives, while his base salary constituted a minor part of the overall package.
Most of his remuneration remains tied to performance metrics, and with Microsoft’s stock advancing by 23 percent this year, surpassing the S&P 500’s 15 percent increase, the CEO’s financial benefits reflect the company’s successful trajectory. Over the last three years, Microsoft’s market value has more than doubled, solidifying its leadership in the AI sector. Microsoft’s impressive stock performance has been fueled by significant investments in AI, particularly through its collaboration with OpenAI and the rapid expansion of Azure cloud services. AI functionalities now enhance nearly all major Microsoft offerings—from Copilot in Microsoft 365 to sophisticated tools in Azure’s enterprise solutions. This comprehensive integration has resulted in unprecedented demand and revenue.
In its earnings report for July, Microsoft announced an 18 percent year-on-year revenue increase, marking its fastest growth in over three years, and surpassing Wall Street estimates. As the fiscal Q1 results approach, investors are closely monitoring Azure’s growth, which remains the primary engine of the company. Nadella’s earnings trajectory has been sharply upward in recent years, rising 63 percent in fiscal 2024 from $48.5 million to $79.1 million. Approximately 90 percent of his pay has consistently been derived from long-term stock awards, ensuring that his wealth fluctuates with Microsoft’s performance. Despite his current record-high salary, Nadella has shown restraint in the past.
After a series of significant cyberattacks last year, he voluntarily requested that Microsoft’s board reduce his cash bonus from $10.66 million to $5.2 million, a rare action for corporate leaders that enhanced his reputation as a considerate and self-aware executive. Behind Microsoft’s impressive financial outcomes lies a more complicated narrative. In July 2025, Nadella revealed over 15,000 job layoffs, admitting that this decision weighed heavily on him. These layoffs occurred amid rising concerns regarding the company’s management of internal dissent, following reports of several activist employees being terminated after protesting Microsoft’s contracts with the Israeli military. These events have ignited ethical discussions, even as investors celebrate the company’s unparalleled growth driven by AI.
Under Nadella’s leadership since 2014, Microsoft has transformed from a conventional software firm into a leading AI titan, with its market capitalization skyrocketing from below $400 billion to over $3 trillion. As competitors like Google and Amazon strive to catch up, Nadella’s pay reflects both his crucial role in this transformation and the substantial value generated during the AI revolution. In summary, while many employees face layoffs, Satya Nadella’s increasing salary illustrates Microsoft’s dual reality—remarkable innovation and wealth generation on one side, and escalating ethical and workforce issues on the other.