Microsoft CEO Satya Nadella’s total 2025 compensation rose nearly 22% from $79.1 million to almost $96.5 million, due mostly to the company’s booming share price boosting the value of his stock awards.
The numbers were disclosed Tuesday afternoon in the company’s annual proxy statement, along with details on Microsoft board changes, shareholder proposals raising concerns about AI risks, and a request from the board for shareholders to approve a new stock plan.
Microsoft’s board nominated Walmart CFO John David Rainey as a new board member, to replace Carlos Rodriguez, current chair of the compensation committee, who is not seeking re-election.
The company’s 2025 fiscal year ended June 30. In evaluating Nadella’s performance, the board cited his work leading the expansion of the company’s AI infrastructure, Microsoft Copilot adoption and new security initiatives.
Much of Nadella’s total compensation — about $84.2 million — is based on the performance of the company’s stock, which has risen more than 23% in the past year, at one point pushing Microsoft’s total market value briefly past $4 trillion.
His cash incentive bonus was $9.56 million, up from the $5.2 million paid in 2024, after he requested a reduction. The proxy statement said the increase reflected strong financial results (117% of target) and a high operational assessment (151.67% of target).
For the first time, security was used as one measuring stick for Microsoft executive compensation, part of an effort by the company to appease regulators and lawmakers after a series of high-profile breaches. In its review, the board focused on Nadella’s role in attempting to address these issues through the implementation of its Secure Future Initiative.
In addition, Microsoft’s board is asking shareholders to approve a 2026 Stock Plan to replace the expiring 2017 plan, requesting authorization for up to 226 million new shares that it says is needed to continue granting equity awards for attracting and retaining talent.
Nadella recently appointed veteran executive Judson Althoff as CEO of Microsoft’s commercial business, a move designed to free Nadella to focus more intensely on long-term AI strategy and technology.
Microsoft’s annual meeting, held virtually, is slated for 8:30 a.m. Dec. 5.
