Microsoft CEO Satya Nadella's total compensation rose by 22% to $96.5 million in fiscal 2025, driven by a surge in stock value and AI advancements, with most of his pay being performance-based.

Nadella's pay includes a modest base salary of $2.5 million, while the majority depends on meeting predefined financial targets, which account for 70% of his compensation.

Since joining Microsoft in 1992 and becoming CEO in 2014, Nadella has led the company's shift to cloud computing, significantly expanding Azure and making strategic acquisitions like GitHub, LinkedIn, and Activision Blizzard.

Microsoft's high executive pay, including Nadella's, has sparked debate about income inequality, with a CEO-to-median employee pay ratio of 480 to 1, based on a median employee salary of around $200,972.

Despite the substantial executive compensation, Microsoft reduced its workforce by up to 9,000 jobs in July 2025, amid ongoing restructuring efforts.

Microsoft defends its pay ratio as reasonable and compliant with regulations, citing exceptional performance metrics such as over $245 billion in revenue for FY 2025.

Microsoft reached a $3 trillion market capitalization in 2025, reinforcing its position as a major global tech enterprise.

The company's financial achievements include Azure revenue surpassing $75 billion, 430 million M365 commercial seats, and 1.2 billion LinkedIn members, driven by growth in cloud and AI products.

Microsoft's shares increased 23% through October 2025, reflecting strong performance in cloud computing and AI, which have been key drivers of its market success.

Growth in AI and cloud services significantly contributed to Nadella's earnings, with the AI boom boosting investor enthusiasm and company valuation.

Nadella's cash incentives are linked to financial results and operational performance, including leadership in cybersecurity initiatives and Microsoft's AI-first strategy.

Microsoft's $1 billion investment in OpenAI, along with an additional $10 billion, has been central to its AI strategy, integrating advanced AI features across its products.