Microsoft shareholders approved a whopping $84 million pay package for CEO Satya Nadella on Wednesday, despite an influential shareholder advisory group urging the company’s stock owners to vote down the proposal, calling the package excessive. The move puts Nadella among the highest paid CEOs in the U.S.
More than 72 percent shareholders voted in favor of Nadella's package, Microsoft said after its annual shareholder meeting on Wednesday, defeating a move by the Institutional Shareholder Services (ISS) to prevent providing Nadella a “mega” grant of restricted stock, The Associated Press (AP) reported. According to ISS, a vote below 70 percent indicates that a company should review its policies, the report added.
Nadella's pay package largely consists of stock grants that would vest between 2019 and 2021. When Nadella took over as Microsoft’s CEO earlier this year, he was paid a base salary of $918,917 and a $3.6 million bonus.
The CEO also received stock grants valued at $79.8 million, which includes a one-time stock grant worth $59 million, an earlier grant valued at $7 million for his performance as executive vice president, as well as a “special retention award” worth $13.5 million while the company searched for a successor to Steve Ballmer. Retention awards are typically given to retain top executives while companies look for a successor.
The Redmond, Washington-based company is also expected to award Nadella an annual grant worth $13 million in the next fiscal year. In contrast, former CEO Ballmer received only $1.3 million in 2013 and held shares worth about $16 billion.
However, Microsoft Chairman John Thompson defended Nadella's pay package, in a letter to shareholders issued last month, saying: “To attract and motivate a world-class CEO that could lead Microsoft through its strategic transformation, the Board designed a compensation structure comprising competitive annual compensation and a one-time long-term equity grant that motivates our CEO to create sustainable long term shareholder value by providing him with the opportunity to share in those gains and build ownership in the company over the next seven years."