Microsoft’s value surges, causing CEO’s salary to reach incredible figure

Microsoft CEO Satya Nadella’s total compensation for 2024 surged 63% to $79.1 million, according to a filing from the company on Thursday.

Approximately $71 million of his salary comes from stock awards. Stock awards provide a way for companies to pay their executives based on performance so their compensation aligns with the shareholders’ expectations.

With the nature of Nadella’s compensation, his jump in salary came after Microsoft’s market value breached $3 trillion. Microsoft’s shares gained about 31.2% during the fiscal year, which ended June 30.

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Nadella earned $48.5 million in 2023.

Despite the astonishing salary figure, Nadella’s cash incentive of $5.2 million was significantly less than the $10.7 million he was eligible for. Nadella reportedly asked for a reduction following multiple cybersecurity breaches, according to the filing obtained by Reuters.

“Mr. Nadella agreed that the company’s performance was extremely strong, but reflecting on his personal commitment to security and his role as the CEO, he asked the board to consider departing from the established performance metrics and reduce his cash incentive to reflect his personal accountability for the focus and speed required for the changes that today’s cybersecurity threat landscape showed were necessary,” the compensation committee wrote in a letter to shareholders, obtained by Quartz.

For comparison, Nvidia CEO Jensen Huang is set to make $34.2 million in 2024, while Apple CEO Tim Cook earned $63.2 million in 2023.

Microsoft and the AI arms race

Microsoft has been openly competing to dominate the market for generative artificial intelligence (AI), making multibillion-dollar investments in that technology, including commercializing and adding AI tools like ChatGPT.

Microsoft recently invested $13 billion into OpenAI, the company behind ChatGPT, earlier this year.

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With AI investments comes the need for power. Microsoft and the energy firm Constellation agreed to a 20-year deal to supply power to the tech giant. In the agreement, Constellation will reopen one of the nuclear reactors on Three Mile Island in Pennsylvania. The Microsoft project, known as the Crane Clean Energy Center, is expected to go online in 2028, the company said. It’s expected to provide upwards of 800 MW to the grid.

According to a report by Quartz, a single Google search uses 0.3 watt-hours of electricity, while a request for OpenAI’s ChatGPT takes 2.9 watt-hours.

“If there were 9 billion ChatGPT queries daily, this would require almost 10 terawatt hours of additional electricity in a year,” Quartz reported.

Frank Sumrall is a content editor at MyNorthwest. You can read his stories here and you can email him here.