(Image source from: Moneycontrol.com)

Microsoft’s CEO Satya Nadella is about to receive a large financial reward as the company benefits from the growing artificial intelligence trend. A recent proxy filing shared on Tuesday shows that Nadella’s total earnings for the fiscal year 2025 increased by 22 percent to $96.5 million, compared to $79.1 million the year before, reflecting Microsoft’s impressive stock results. A significant portion of Nadella’s earnings comes from stock awards valued at over $84 million, showing his close connection to the company’s market success. He also gained more than $9.5 million in cash bonuses, while his regular salary made up only a small part of his overall pay. His compensation package is primarily tied to performance, and with Microsoft’s stock rising by 23 percent this year, much higher than the 15 percent increase of the S&P 500, it is understandable why Nadella’s earnings are climbing. Over the last three years, Microsoft’s stock price has more than doubled, reinforcing the company’s status as a successful player in the AI movement.

The rise in Microsoft’s stock is driven by its strong focus on artificial intelligence, especially through its collaboration with OpenAI and the swift growth of its Azure cloud services. AI features are now central to everything from the tools in Microsoft 365 to Azure’s business services, creating new customer demand. In its latest financial report from July, Microsoft showed an 18 percent growth in revenue compared to the previous year, marking its fastest growth in over three years and exceeding Wall Street predictions. With the fiscal Q1 results expected next week, investors are keeping a close eye on Azure since cloud computing continues to be the company’s primary driver of growth. Nadella’s increasing earnings follow a 63 percent rise in compensation during fiscal 2024, when he received $79.1 million, rising from $48.5 million the year before. Importantly, around 90 percent of his earnings have consistently come from long-term stock awards, meaning his wealth fluctuates with Microsoft’s performance.

Nevertheless, the CEO has indicated a readiness to moderate his bonuses. Last year, he voluntarily requested that Microsoft’s board reduce his cash bonus by half, bringing it down from $10.66 million to $5.2 million after a series of serious cyberattacks that affected the company’s operations. This was an unusual act in the business world, which helped strengthen Nadella’s image as a considerate and aware leader.

Yet, things haven’t been entirely easy. Even with record earnings and climbing stock values, Microsoft has experienced unrest among its employees this year. In July, Nadella issued a memo to all staff expressing his sorrow over the choice to lay off over 15,000 workers in 2025, stating that this decision had been “weighing heavily” on him. The company has also faced criticism regarding its response to internal protests, as reports emerged of several activist workers being let go after opposing Microsoft’s agreements with the Israeli military. These events have led to discussions about the company’s ethics, even while investors rejoice in its remarkable achievements in AI and cloud technology.

During Nadella’s ten years of leadership, Microsoft has evolved from a giant in software to a leading force in AI. Since he became the CEO in 2014, the company’s market worth has surged from less than $400 billion to over $3 trillion, making it one of the most valuable companies ever. Now, as Microsoft continues to take the lead in the generative AI landscape, while rivals such as Google and Amazon rush to keep pace, Nadella’s significant salary reflects both his crucial part in driving this change and the substantial financial benefits associated with the AI boom. In summary: while many employees at Microsoft have experienced job losses, the individual at the highest level is being richly compensated for turning the company into a leader in artificial intelligence.