Microsoft Corp. shareholders voted Wednesday to approve CEO Satya Nadella’s $84 million in pay despite recommendations by an investor advisory group that shareholders vote against the compensation because it thought Nadella was being paid too much.
Nadella was appointed CEO of Microsoft in February to replace Steve Ballmer who suddenly announced his desire to retire.
Microsoft reported that the company’s 2014 executive pay proposal was approved by 72 per cent of the shareholder. That’s much lower that previous votes by Microsoft shareholders but still puts Nadella’s pay package among the highest paid CEO’s in the United States.
By comparison, Tim Cook received $378 million when he became CEO of Apple Inc. in 2011, Larry Ellisson received $67.3 million in stock options and other pay value in 2013 and Ballmer was paid $1.3 million last year but holds shares in Microsoft estimated at $16 billion, according to the Associated Press.
Meanwhile, Amy Hood, Microsoft’s chief financial officer, said during Wednesday’s shareholders meeting that the company had a solid fiscal year 2014 performance.
“I’m very pleased with the results we delivered in 2014 and excited about the opportunities we have as a company in 2015 and beyond,” Hood said. “We firmly believe that the highest shareholder value has always been created by delivering the products and services our customers love and use, which will enable us to capitalize on the massive opportunities in a mobile-first, cloud-first world.”
The following proposals were acted on by the company’s shareholders at the shareholder meeting:
- Elected 10 directors to serve until the next annual meeting of shareholders. All director nominees received a vote of more than 92 per cent of votes cast
- Approved, on an advisory basis, the fiscal year 2014 compensation of the company’s named executive officers. The advisory measure received more than 72 per cent of votes cast
- Ratified the selection of Deloitte & Touche LLP as the company’s independent auditor, with a vote of nearly 99 per cent of votes cast
- Rejected a shareholder proposal to allow proxy access for shareholders. The shareholder proposal received approximately 10 per cent of votes cast
Nadella recently landed in hot water after incurring the wrath of scores of women around the world following his comments (spoken at an event celebrating women in computing no less) that women should not ask for a raise because it was not “good karma.”
Nadella was speaking before a crowd of about 500 women at the 2014 Grace Hopper Celebration of Women in Computing event, in Phoenix, Ariz., when he made the gaffe. Hopper was an American computer scientist and United States Navy rear admiral. She was one of the first programmers of the Harvard Mark I computer, inventor of the first compiler for a programming language and she popularized the idea of machine-independent programming languages which led to the development of COBOL.
During the Q&A portion of the sold-out event, Nadella was asked by Maria Klawe, a member of Microsoft’s board of directors, for his advice to women who are not comfortable about asking for a salary increase.
“It’s not really about asking for a raise, but knowing and having faith that the system will give you a raise,” he answered. “That might be one of the initial ‘super powers’ that, quite frankly, women who don’t ask for a raise have. It’s good karma. It will come back.”
Nadella quickly apologized for his statements tweeting: “Was inarticulate re how women should ask for raise. Our industry must close gender pay gap so a raise is not needed because of a bias.”
Last month, Institutional Shareholder Services, a prominent institutional investment adviser, urged its clients to vote against Nadella’s pay package.
The group called the package a “mega equity award” and argued that it was out of sync with Microsoft’s “objectively measured company performance,” according to a report in Computerworld.com.
According to Microsoft’s filings with the United States Securities and Exchange Commission, for the company’s fiscal 2014, Nadella received $919,000 in salary, $3.6 million in cash bonus and approximately $65 million as an equity starter kit. Nadella also received last year a stock approximately worth $13.5 million as part of Microsoft’s executive retention plan.
ISS estimates that Nadella’s compensation for 2014 totalled $90.8 million.