Satya Nadella’s salary has jumped to the highest since he became Microsoft Corp.’s chief executive officer more than a decade ago, thanks to the progress the company has seen in AI.
Microsoft CEO Satya Nadella. (File Photo)
The India-born Microsoft CEO will draw a total compensation of $96.5 million in Fiscal 2025 as against $79.1 million in Fiscal 2024, as “Satya Nadella and his leadership team have positioned Microsoft as a clear AI leader for this generational technology shift”, the company wrote in a shareholder note included in its annual report released on Tuesday.
About 90% of Nadella’s compensation, which includes a $2.5 million salary, is in Microsoft shares, the company said in the filing. Microsoft Chief Financial Officer Amy Hood’s total compensation has increased to $29.5 million. Chief Commercial Officer Judson Althoff will receive a pay package of $28.2 million.
How Satya Nadella’s pay package has evolved
Nadella, who joined Microsoft in 1992, drew a total compensation of $84.3 million when he became the company’s third only CEO after Bill Gates and Steve Ballmer in 2014, thanks to stock awards of $79.77 million.
The equity component dipped in the subsequent years, but last year, he received $71.23 million in Microsoft stock. His salary, in the meantime, has increased from $918,917 in 2014 to $2.5 million in 2025.
“During his tenure as CEO, Microsoft’s cumulative total shareholder return through 30 June 2025 was over 1500% and market capitalisation increased by almost $3.4 trillion,” according to the annual report.
How Satya Nadella’s salary compares with US CEOs
Nadella isn’t the highest paid CEO in the US—He is among the Top 5—but his pay far outstrips the median CEO salary in the US.
According to the 2025 Equilar | Associated Press CEO Pay Study, the median CEO compensation at an S&P 500 company was $17.1 million. In comparison, the Top 10 CEOs by salary in the US have a median pay of roughly $50 million, according to the Visual Capitalist.
The primary reason for the “wealth gap” among the CEOs is compensation by way of stocks—equity awards made up about 75% of total CEO pay in 2024, according to the Equilar AP study. That’s down to how much shareholder value a CEO generates for the company.
CEO Pay vs Employee Salary
The “wealth gap” is most visible when a CEO’s pay is compared with that an employee at an S&P 500 company.
According to a Harvard Law study, at $17.1 million, an S&P 500 CEO earned 192 times the median employee salary of $85,419 in 2024. That ratio in fact worsened from 186:1 in 2023. At Microsoft, the ratio stands at 480:1.
There’s a reason why CEOs earn “a pay package” and employees a “salary”.
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