- Microsoft’s wealth creation increasingly favors shareholders at the expense of reducing its workforce
- AI investments generate record revenue even as job security declines across divisions
- Microsoft’s success now rests largely on the uncertain economics of artificial intelligence
Microsoft has confirmed that CEO Satya Nadella will receive total compensation worth $96.5 million for fiscal 2025, an increase of 22% from the previous year.
The package includes a $2.5 million base salary and $84 million in stock, with most of his salary tied to performance rather than seniority.
The company explained that Nadella’s stock compensation is paid “exclusively through performance share awards tied to long-term value creation” and not through time-based awards.
AI growth meets financial pressure
Microsoft says this structure is intended to “encourage its continued leadership and drive sustained business growth and shareholder value.”
The board justified the increase by highlighting Microsoft’s strong financial performance under his tenure, with revenue tripling and net profit quadrupling since 2014.
The company’s results for the year ended June 30, 2025 reflect this trajectory.
Microsoft reported revenue of $281.7 billion and net profit of $101.8 billion, with its cloud storage and AI businesses leading the increase.
Azure’s revenue surpassed $75 billion, up 34% year-over-year, while the company said it now operates “70 operational regions and more than 400 data centers” worldwide.
Microsoft also claims “430 million M365 Commercial paid seats”, “89 million M365 consumer subscribers” and “1.2 billion LinkedIn members”.
Yet behind these numbers lies a growing question: Can the company’s growing focus on AI tools continue to fund its enormous compensation packages?
The contrast between Nadella’s rising salaries and Microsoft’s internal cost cutting is hard to ignore.
Just months before the salary announcement, the company cut up to 9,000 jobs, leaving remaining employees with a median annual salary of $200,972.
Microsoft revealed that for 2025, “the ratio of our CEO’s annual total compensation to the median employee’s annual total compensation was 480 to 1.”
Despite record profits, such disparity may fuel skepticism about whether the company’s AI-driven strategy actually benefits its entire workforce.
Microsoft continues to invest heavily in artificial intelligence, with 230,000 organizations using Copilot Studio and 14,000 customers linked to its Azure AI Foundry service.
However, the company has not confirmed how much these customers are paying, leaving analysts uncertain about the long-term return of these projects.
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