Microsoft CEO Satya Nadella's total compensation for the financial year 2024-2025 has reached $96.5 million, marking a significant 22% increase from the previous year’s $79.1 million. This rise in pay is largely attributed to the company's impressive performance in the artificial intelligence sector and a notable increase in its stock price, which has climbed about 23% this year, surpassing the S&P 500's 15% gain.

According to Microsoft’s latest proxy filing, a substantial portion of Nadella's earnings, over $84 million, came from stock awards, which ties his compensation closely to the company's market performance. He also received $9.5 million in cash incentives, while his base salary constituted a small part of his overall earnings. This performance-linked pay structure has been a consistent feature of his compensation package, with nearly 90% of his earnings derived from long-term stock awards.

Under Nadella's leadership, Microsoft has transformed into a leading player in the AI landscape, with its market value soaring from under $400 billion to over $3 trillion in the past decade. The company’s aggressive investments in AI, particularly through its partnership with OpenAI and the expansion of Azure cloud services, have driven unprecedented demand and revenue growth. In its recent earnings report, Microsoft reported an 18% year-on-year revenue increase, the fastest growth in over three years.

However, this financial success comes amid a backdrop of significant workforce reductions. In July 2025, Nadella announced layoffs affecting over 15,000 employees, a decision he described as “weighing heavily” on him. These layoffs have raised ethical concerns, especially following reports of employee dismissals related to protests against Microsoft’s contracts with the Israeli military.

Despite the challenges, Nadella's rising pay reflects both his pivotal role in Microsoft's transformation and the immense value generated during the AI revolution. As the company prepares to release its first-quarter results for fiscal year 2025, investors remain focused on the growth of Azure, which is central to Microsoft’s strategy in the AI domain. Nadella's compensation highlights the dual reality of extraordinary innovation and the ethical dilemmas faced by the company in today's rapidly evolving tech landscape.