Microsoft CEO Satya Nadella has received a rich pay rise on his promotion, with a salary of $1.2 million, a maximum annual cash bonus of three times that and a stock award of $13.2 million for next fiscal year.
According to a Reuters report, that is much more than the moderately paid Ballmer, who took home less than $1.3 million last year, chiefly because of his refusal to take stock awards, which he deemed unnecessary given his ownership of $12 billion worth of Microsoft shares.
Nadella’s pay is modest in comparison to Yahoo CEO Marissa Mayer, who got a compensation package that could total more than $70 million when she took the helm at Yahoo two years ago.
Why Satya Nadella
It seems that Microsoft is betting a mix of old and young blood will revive the aging technology pioneer, but Satya Nadella may find it tough to push change with co-founder Bill Gates and former CEO Steve Ballmer breathing down his neck.
The 46-year-old India native and former enterprise business chief takes on the task of exploring new directions. He is taking new responsibilities at a time when the software giant is shifting its focus to devices and services.
Notably, Microsoft could not hire CEOs of Ford Motor, COO of Qualcomm and CEO of Ericsson to head the software behemoth.
Gates is giving up the board chairmanship to fellow director John Thompson. That, plus Nadella’s promotion, marks a changing of the guard at a 39-year-old company that fueled the PC revolution, but is struggling with its longer-term identity after missing the boat on the mobile computing revolution, Reuters reported.
Challenges for new Microsoft CEO
The online element may play to the strengths of Nadella, who led the creation of Microsoft’s Internet, or cloud, services.
Nadella has pushed the company in the direction of an Internet-based future, using its network of vast data centers to host products such as Office 365, a subscription-based online version of its ubiquitous business software.
Nadella is only its third CEO in 39 years, taking over from Ballmer, who inherited the job from Gates in 2000. His appointment ends a five-month search process triggered by the August announcement of Ballmer’s decision to retire.
The move is also a significant shift for Gates, who along with Apple’s Steve Jobs was one of the key forces who shaped the personal computer revolution of the late 20th century, making him an icon of the new information economy and the world’s richest person in the process.
Gates, 58, left day-to-day work at Microsoft in 2008 to focus on philanthropy at his Bill & Melinda Gates Foundation, which he says is still his main job. He owns 4.3 percent of Microsoft’s outstanding shares.
Under the new CEO, Microsoft faces a slow erosion of its PC-centric Windows and Office franchises and needs somehow to challenge Apple and Google in the new realm of mobile computing. At the same time, some investors are campaigning for retrenchment and a bigger cut of the company’s massive cash pile.