Microsoft CEO Satya Nadella joins $US1b club after share surge

Microsoft’s AI-driven rally has pushed its stock to new highs and nudged chief executive officer Satya Nadella’s total windfall from the company past a gilded threshold: $US1 billion ($1.5 billion).

Nadella’s boon includes all payouts he has collected from Microsoft that can be parsed from regulatory filings: equity grants, salary, bonuses and dividends. It’s underpinned by Microsoft shares returning more than 1000 per cent since his first day in the top job.

It’s not clear what Nadella has done with these proceeds, and Bloomberg’s calculation does not account for expenditures or private investments. Regulatory filings show that he’s gifted shares worth $US20 million over the years, though there’s no disclosure of the beneficiaries.

Microsoft spokesperson Frank Shaw said by email that Nadella “does not have net worth of a billion dollars or more.” He declined to comment further.

Nadella took the reins at Microsoft in 2014, at a time when many thought the technology giant’s best days were behind it. Today, it’s the second-largest company in the world and is considered the frontrunner in the race to capitalise on artificial intelligence.

Nadella’s most transformative move may prove to be the company’s multibillion-dollar investment in OpenAI and its ChatGPT bot, which a senior executive called a “Windows 95 moment,” referring to the hugely successful software release nearly three decades ago. That catapulted Microsoft ahead of competitors like Alphabet Inc. in AI capabilities, and is the main driver of the stock’s 50 per cent surge this year.

“He is a well-liked person and has built an incredible team around him,” said Sam Garg, an associate professor at ESSEC Business School in Singapore.

“He is also among the few tech CEOs who are not reviled by politicians and regulators.”

An exclusive club
Nadella is part of an exclusive club of corporate titans who’ve amassed 10-figure hauls from their employers. He’s traced a similar arc to Apple’s Tim Cook, the leader of the only company in the world that’s more valuable than Microsoft. Both took over successful firms at inflection points, and both had to contend with the long shadows of lauded founders. Nine years after ascending to the CEO role, Cook reached billionaire status.

The bulk of Nadella’s haul stems from a series of equity grants he has received over the years, with payouts tided both to his continued service and to performance targets. He’s periodically sold some of the shares.

It also accounts for cash bonuses and dividends he’s received, assuming they’re taxed at the top federal rates.

Like for Cook, the ballooning value of Nadella’s awards largely stems from Microsoft’s stock returns, including reinvested dividends, since early 2014.

It also underscores a decade of change at the Redmond, Washington-based company. When Nadella became CEO, many saw Microsoft as a company of dwindling relevance: a juggernaut known for Windows and Office trying to find its way in a world of hand-held devices. Charting the path forward fell to Nadella, a native of Hyderabad, India, with degrees in electrical engineering and computer science.

He started at Microsoft in 1992 and worked on business software and services through much of his career. He earned an MBA by taking weekend classes at the University of Chicago, commuting from Seattle.

He moved through various leadership roles and eventually became president of Microsoft’s server business. From there, he was plucked as CEO after a lengthy process that included several internal and external candidates. He was 46 at the time.

A few years before, Nadella had sat down with then-CEO Steve Ballmer for his annual review. In a 2014 interview with the New York Times, Nadella recalled asking Ballmer how he was performing.

“You don’t have to ask me, ‘How am I doing?’” Ballmer responded. “At your level, it’s going to be fairly implicit.” Bloomberg