Microsoft to pay Satya Nadella $14.4-18 million annually for CEO gig

Microsoft is going to spend a lot more money annually to keep its newly minted CEO Satya Nadella than it did with its previous leader Steve Ballmer. In a filing with the U.S. Securities and Exchange Commission on Tuesday, the company revealed that Nadella could earn as much as $18 million per year in his new gig.

The filing shows that Nadella's base salary will be increased to $1.2 million a year. That's already much higher than Ballmer's take home pay of $697,500 a year . Ballmer was also eligible to get a cash bonus every year, based on the company's performance. In 2013, he received $550,000 in bonus pay, which amounted to just 79 percent of what he could have earned.

Ballmer, unlike other major company CEOs, did not receive an annual share award bonus (he already owns nearly four percent of Microsoft's stock). By contrast, Nadella is going to get a very nice share awards package. Microsoft's filing says, "For the Company’s 2015 fiscal year, on an annualized basis Mr. Nadella’s EIP stock award will be $13,200,000."

Nadella will get an annual cash bonus, again based on performance, which will be between 0 and 300 percent of his base salary. Assuming he gets the full bonus, he will be able to collect another $3.6 million a year. Finally, Microsoft will offer him even more stock options over the next several years if the company hits certain share prices based on its performance on the S&P 500. You have to be a smart accountant to fully understand the formula Microsoft is using for this bonus, but basically, Nadella could earn tens of millions of dollars more over the next several years if the company reaches or exceeds its target share price.

Source: SEC via GeekWire | Image via Microsoft

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Top CEO salary!

Ellison in fiscal year 2013 made $78.4 million. Said that there are different methods to calculate the "real income" of this kind of people. For example: Ellison received $1 as salary, $76.9 million (face value when he got them) in shares and around 1.2 millions in Benefits
Of course personally I would be more than happy just with the benefits......

Funny, when they asked him why he was excited about the position and why he took it, he never mentioned Money once.... yet for some odd reason I think it was at least a bullet point.

- Open more doors for Cloud Computing.
- Fire Maggie for making me look stupid that one time.
- Make what takes an average man 300 years to make in 1 year.

astropheed said,
Funny, when they asked him why he was excited about the position and why he took it, he never mentioned Money once.... yet for some odd reason I think it was at least a bullet point.

- Open more doors for Cloud Computing.
- Fire Maggie for making me look stupid that one time.
- Make what takes an average man 300 years to make in 1 year.

I think you'd be surprised to here that while it certainly plays a part, the award isn't anywhere near the top of the list for CEOs. Especially executives in massive companies like this that are earning a tonne anyway.

Usually the CEO has goals, and takes a job based on being able to work how he/she wants and to make the changes he/she needs to make.

Nashy said,

I think you'd be surprised to here that while it certainly plays a part, the award isn't anywhere near the top of the list for CEOs. Especially executives in massive companies like this that are earning a tonne anyway.

Usually the CEO has goals, and takes a job based on being able to work how he/she wants and to make the changes he/she needs to make.

This. It's more about the challange and doing something they genuinely enjoy than the reward... Those doing it for the pay aren't good CEO's... lol

astropheed said,
Funny, when they asked him why he was excited about the position and why he took it, he never mentioned Money once.... yet for some odd reason I think it was at least a bullet point.
It may well have been, or not, we don't know what sort of person he is. For some people it's the challenge and ambition that matters more since by that time they're already in the top earners' bracket. But even if that was his main motivation do you honestly think he'd acknowledge it and sound mercenary? Heck, even when one's at the beginning of one's career and while switching jobs they ask the reason why, nobody comes right out and says it's because of the money although both parties know that it plays a big part for most people.

Not really surprising. In all honesty, Balmer was kind of on the low end of the CEO pay scale (for such a large company)... lol

M_Lyons10 said,
Not really surprising. In all honesty, Balmer was kind of on the low end of the CEO pay scale (for such a large company)... lol

Indeed. Ballmer, as well as the other, early MS employees, made the bulk of his wealth in the beginning when a lot of shares were distributed.
Still his, relatively of course, modest salary is a further proof of his love for the company.

M_Lyons10 said,
Not really surprising. In all honesty, Balmer was kind of on the low end of the CEO pay scale (for such a large company)... lol

yea, but if succesful in his job he would make himself very rich, given his shares. He didn't need much additional annual pay as an incentive. His own financial prosperity was already tied to MS.

Satya needs to get the same incentive. So they're going to make him filty rich in stock. It's peanuts in the grand scheme of things but it wil give the shareholders the reassuring idea that Satya isnt going to demonstrate undesirable performance.

dvb2000 said,

CEO pay is ridiculous these days - NO ONE is worth $18m a year.

It is all relative: if someone is able to generate, let us say, 4 billions in profit each fiscal year why such person should not make, roughly, 0.5% of that amount? If you sell your house you pay 6% commissions to the realtor.....

Fritzly said,

It is all relative: if someone is able to generate, let us say, 4 billions in profit each fiscal year

He does nothing of the sort, he probably do nothing more than rubber stamp ideas of his underlings. Bill Gates on the other hand was the genius of Microsoft.

If Nadella had any original and profit creating ideas he would start his own company.

dvb2000 said,
He does nothing of the sort, he probably do nothing more than rubber stamp ideas of his underlings. Bill Gates on the other hand was the genius of Microsoft.
Really, so Bill single-handedly created everything Microsoft ever released under his watch?

Fritzly said,

It is all relative: if someone is able to generate, let us say, 4 billions in profit each fiscal year why such person should not make, roughly, 0.5% of that amount? If you sell your house you pay 6% commissions to the realtor.....

Unless the CEO is producing all alone the profit then no.