Microsoft CEO awarded record-breaking compensation in the same year 15,000 people were fired

Microsoft's CEO, Satya Nadella, has received a record-breaking bonus bordering on the $100 million mark, the same year that Microsoft laid off approximately 15,000 employees.

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Nadella was awarded $96.5 million in compensation for the performance of the company, and of that $96.5 million $84 million was in the form of stock awards, while the other $9.5 million was awarded in cash incentives. Nadella takes home $2.5 million from his general salary, which doesn't include his incentives and bonuses.

The massive pay for Nadella comes as Microsoft becomes one of the few companies to reach $1 trillion market cap. Over the past three years, Microsoft's shares have more than doubled, and in 2025 alone, the stock price has increased by 23%.

• Read more: Microsoft replaces fired workers with AI that the former employees built

However, simultaneously, the company has let go of nearly 15,000 employees as of May 2025, stating a shift in focus to more high-growth areas such as artificial intelligence, cloud computing, and infrastructure. Moreover, the company is aiming to streamline operations by removing managerial layers, combining teams, and eliminating redundant roles.

Analysts estimate the firing of nearly 15,000 employees was a necessary play to offset the massive $80 billion annual investment in AI. Other factors include an overhiring spree during the COVID-19 pandemic, and the massive overspending and purchasing of game studios, such as Activision-Blizzard, and the studios that fall beneath that publisher's banner.

• Read more: Microsoft to ax thousands more employees after letting go 6,000 people in May

These factors, along with Microsoft's pivot into the AI boom, are the biggest reasons for Nadella's considerable compensation package, and Microsoft isn't the only company seeing massive gains. According to Citigroup strategists, nearly 50% of the S&P 500's overall $57 trillion market capitalization has a "high" or "medium" exposure to AI.

As for Nadella, the Microsoft CEO has quite a healthy package compared to other tech company CEOs, with NVIDIA's CEO Jensen Huang taking his first pay increase in a decade to $49.9 million, which includes $6 million as part of a non-equity incentive plan, $38.8 million in stock awards, and $3.5 million for residential security, drivers, car expenses, and security monitoring.

By comparison, Apple CEO Tim Cook made more than $74.6 million in 2024, with $58.1 million in stock awards, $12 million in non-equity incentive plan compensation, and $1.5 million in other compensations. Furthermore, the median total compensation for CEOs of companies within the S&P 500 was approximately $17.1 million throughout 2024, and for the tech industry specifically, $19.3 million in 2024, which would be about 20% of Nadella's new pay agreement.