Microsoft CEO Satya Nadella has received a massive pay hike in fiscal 2025, reflecting the company’s extraordinary success in the artificial intelligence era. According to Microsoft’s latest proxy filing released Tuesday, Nadella’s total compensation surged 22 percent to $96.5 million (₹847.31 crore), up from $79.1 million the previous year. The raise underscores how tightly Nadella’s earnings are tied to Microsoft’s soaring stock and AI-driven expansion.

A large portion of his pay — over $84 million — came from stock awards, aligning his fortune directly with Microsoft’s market performance. He also earned $9.5 million in cash incentives, while his base salary formed a small fraction of the total package. The majority of his pay remains performance-linked, and with Microsoft’s stock climbing 23 percent this year, outpacing the S&P 500’s 15 percent gain, the CEO’s windfall mirrors the company’s success story. Over the past three years, Microsoft’s market value has more than doubled, firmly establishing its dominance in the AI revolution.

Riding the AI Wave

Microsoft’s meteoric stock performance has been propelled by its aggressive investment in AI, primarily through its partnership with OpenAI and the rapid growth of Azure cloud services. AI capabilities now power nearly all major Microsoft products — from Copilot in Microsoft 365 to advanced tools within Azure’s enterprise offerings. This deep integration has driven unprecedented demand and revenue.

In its July earnings report, Microsoft reported 18 percent year-on-year revenue growth, its fastest in over three years, exceeding Wall Street expectations. With fiscal Q1 results expected soon, investors are closely tracking Azure’s growth as it remains the company’s primary driver.

From Pay Cuts to Record Pay

Nadella’s compensation trajectory has been steep in recent years. His earnings jumped 63 percent in fiscal 2024, rising from $48.5 million to $79.1 million. Notably, around 90 percent of his pay has consistently come from long-term stock awards, ensuring his wealth rises and falls with Microsoft’s success.

Despite his current record-breaking pay, Nadella has demonstrated restraint before. Following a series of high-profile cyberattacks last year, he voluntarily requested Microsoft’s board to halve his cash bonus from $10.66 million to $5.2 million — a rare move among corporate executives that bolstered his image as a thoughtful and self-aware leader.

Layoffs and Controversy

Behind Microsoft’s stellar financial results lies a more complex picture. In July 2025, Nadella announced over 15,000 job cuts, expressing that the decision had been “weighing heavily” on him. The layoffs came amid growing concerns about the company’s handling of internal dissent, following reports that several activist employees were terminated after protesting Microsoft’s contracts with the Israeli military. The incidents have sparked ethical debates even as investors cheer the company’s unprecedented AI-driven growth.

The Billion-Dollar Transformation

Under Nadella’s decade-long leadership since 2014, Microsoft has evolved from a traditional software company into a global AI powerhouse, with its market capitalization soaring from under $400 billion to over $3 trillion. As competitors like Google and Amazon scramble to catch up, Nadella’s compensation reflects both his instrumental role in this transformation and the immense value created during the AI revolution.

In essence, while thousands of employees face layoffs, Satya Nadella’s rising pay symbolizes Microsoft’s dual reality — extraordinary innovation and wealth creation on one hand, and growing ethical and workforce challenges on the other.