Satya Nadella, the chief executive of Microsoft, has had his bonus docked by $5.46 million (£4.2m) after the company was reprimanded for a string of security failures that exposed the United States government to Russian and Chinese hackers.
The cash portion of Mr Nadella’s 2024 bonus was cut from $10.66m to $5.2m at his request, Microsoft said in a filing ahead of its annual meeting.
Earlier this year the US government slammed Microsoft for a “cascade of errors” that allowed Chinese hackers to gain access to email accounts of senior officials including Gina Raimondo, the US commerce secretary.
Further lapses from the company also allowed Russian hackers to break into email accounts of US government agencies and major companies. Microsoft was also ensnared by an outage at the cyber security company CrowdStrike which caused global chaos by affecting millions of Windows computers and servers.
The Biden administration said that “Microsoft’s security culture was inadequate and requires an overhaul” given the company’s critical position running email and cloud computing systems.
Microsoft said in a statement: “Mr Nadella agreed that the company’s performance was extremely strong, but reflecting on his personal commitment to security and his role as the CEO, asked the board to consider departing from the established performance metrics and reduce his cash incentive to reflect his personal accountability for the focus and speed required for the changes that today’s cyber security threat landscape showed were necessary.”
Mr Nadella’s total pay still rose to $79.1m, up 63pc on last year. He makes a salary of $2.5m and was awarded $71.2m in Microsoft shares, largely based on existing performance plans. The package is likely to make him one of the world’s highest-paid executives.
Mr Nadella became Microsoft’s chief executive in 2014 and the company’s share price has risen more than tenfold since then, jostling with Apple and Nvidia for the position of world’s most valuable business.
His total compensation since then has been worth more than $1 billion thanks to the company’s share boom, although Microsoft said last year that Mr Nadella himself is not a billionaire.
“Since the board of directors appointed Mr Nadella as the third chief executive officer in its history in 2014, Microsoft has nearly tripled revenue to $245.1bn, nearly quadrupled net income to $88.1bn, and more than quadrupled diluted earnings per share to $11.80,” Microsoft said in the filing.
“In addition to another year of consistently strong financial performance, Mr Nadella and his leadership team have positioned Microsoft to continue to drive performance for years to come.”
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