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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Janet I. Tu.

February 4, 2014 at 3:39 PM

New Microsoft CEO Satya Nadella could earn $18 million next year

Newly appointed Microsoft CEO Satya Nadella could earn a total target compensation package of about $18 million in his first full year as CEO.

That’s according to a form Microsoft just filed with the U.S. Securities and Exchange Commission that shows Nadella’s offer letter and compensation.

According to the filing, Nadella’s base salary is now $1.2 million.

His bonus target will be 300 percent of his salary — or $3.6 million for fiscal year 2015, his first full year as CEO.

And he will receive a stock award worth $13.2 million for fiscal year 2015.

The $18 million target compensation is in line with the tech industry average, said Mark Murray, a Microsoft spokesman.

In addition, Nadella could receive longer term stock awards tied to total shareholder return.

Those awards would be paid out in three overlapping 5-year periods.

If, for instance, Nadella’s leadership results in Microsoft’s total return to shareholders to outperform 60 percent of the S&P 500,  he would qualify for 600,000 shares of Microsoft stock awards at the end of five years. If the total shareholder return is at the 30th percentile or less, he would get 150,000 shares; if it’s at the 80th percentile or above, he would get 900,00 shares.

“It ties his economic interests to the interests of shareholders which we think is a good thing,” Murray said.

Nadella earned a total compensation package of $7.7 million in fiscal year 2013, when he served as president of the Server and Tools division at Microsoft.

Nadella’s predecessor as CEO, Steve Ballmer, received $1.26 million in total compensation in fiscal year 2013.

That total included a base salary of $697,500 and a bonus of $550,000, which represented 79 percent of his target award.

Ballmer had asked to not receive stock awards as part of his compensation. He already owned about 333 million shares of Microsoft stock as of last fiscal year— about 4 percent of the outstanding shares.

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