Microsoft’s fiscal year might have been one for the record books, but it’s also raising eyebrows for all the wrong reasons. According to Windows Central, CEO Satya Nadella pocketed a jaw-dropping $96.5 million in total compensation this year – a 22% jump from last year’s $79 million – while over 15,000 Microsoft employees were handed pink slips.
Most of Nadella’s windfall came in the form of stock awards worth about $84 million, with another $9.5 million in cash incentives and a $2.5 million base salary. The company says the package reflects his “performance-based leadership” during what it calls a “generational shift in technology,” as Microsoft continues to dominate the artificial intelligence race. That AI push has paid off – quite literally. Microsoft’s market value briefly hit $4 trillion earlier this year, making it one of only two companies in history to do so.
According to Microsoft’s latest proxy filing, Nadella’s achievements include expanding the company’s AI infrastructure to more than 400 facilities across 70 regions, adding over two gigawatts of capacity, and launching major products like Azure AI Foundry and Copilot. The board praised him for “positioning Microsoft as a clear artificial intelligence leader.” Investors certainly seem to agree, with the company reporting $281.7 billion in revenue for 2025, up 15% year over year.
But behind those glowing numbers lies a harsher reality. The same fiscal year that padded Microsoft’s profits also saw one of its largest layoff sprees in recent history. Since January, the company has cut more than 15,000 positions across gaming, security, and management divisions. In May alone, around 6,000 roles were eliminated, followed by thousands more in June and July as part of a “restructuring” effort. As Business Insider noted, the optics of a record-breaking CEO payday alongside mass layoffs are, at best, complicated.
Nadella has publicly expressed “sincere gratitude” to those affected, calling the decisions “among the most difficult” Microsoft makes. However, the company’s compensation committee argues that cutting executive pay wouldn’t meaningfully offset the costs of keeping thousands employed, pointing out that Microsoft can spend roughly $1 billion on every 10,000 employees. Still, for many, it’s a tough sell when the boss takes home nearly $100 million.
Some insiders are also warning that Microsoft’s obsession with driving up its stock price rather than focusing on product quality could backfire. In a year that perfectly sums up modern corporate capitalism, Microsoft’s record profits and record layoffs prove that success often comes with an asterisk.
