$84 million Pay Package approved for CEO Satya Nadella on Wednesday
A massive $84 million pay package for CEO Satya Nadella has been approved by Microsoft shareholders in spite of a powerful shareholder advisory group advising the company's stock owners to vote down the proposal. Powerful shareholders called this proposal excessive and this approval has put Nadella among the highest paid CEOs in the US.
Microsoft said after annual shareholder meeting that over 72% shareholders voted in favor of Nadella's package. According to the Institutional Shareholder Services (ISS), a vote below 70% shows that a company must review its policies.
Nadella's pay package mainly includes stock grants that would vest between 2019 and 2021. Nadella was paid base salary of $918,917 and a $3.6 million bonus when he took over as Microsoft's CEO earlier this year. The CEO also got stock grants valued at $79.8 million, which involves a one-time stock grant worth $59 million.
An earlier grant valued at $7 million for his performance as executive vice-president, and also a 'special retention award' worth $13.5 million. Retention awards are normally given to retain top executives as companies look for a successor. Former CEO Ballmer had been given only $1.3 million in 2013 and held shares value about $16 billion.
Microsoft Chairman John Thompson secured Nadella's pay package and said in a letter to shareholders that to attract and encourage a world-class CEO who could lead Microsoft through its planned transformation, the Board had made a compensation structure comprising competitive annual compensation and a one-time long-term equity grant.
Thompson also said that this grant will encourage the CEO to make sustainable long-term shareholder value by giving him the chance to share in those gains and make ownership in the company in the next seven years.
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