KEY POINTS
- Satya Nadella joined Microsoft in 1992
- He took over as CEO of Microsoft in 2014
- A whopping 96% of Nadella's salary in 2022 was performance-based
Microsoft Chief Executive Satya Nadella begins the New Year with a net worth of about a billion dollars, according to estimates. And a month into the year, he will complete a decade at the helm of the world's largest software maker.
The soft-spoken 55-year-old Nadella, born in Hyderabad, India, is only the third CEO of Microsoft after Bill Gates and Steve Ballmer. The Microsoft CEO's estimated net worth is $1 billion as of July 2023, The Street reported.
Founder Gates helmed Microsoft since its inception to Jan. 1, 2000, when Ballmer took charge. Gates spent nearly a quarter century – 24 years, 8 months and 28 days – at the helm of Microsoft, co-founded by him and Paul Allen on April 4, 1975.
Ballmer, who then took over as the CEO, completed 14 years, a month and three days steering the company, following it came to Nadella to oversee the fortunes of the software behemoth.
Fortune favors the underrated
Steering clear of other high-profile CEOs, Nadella remained an unassuming character in Microsoft Corp., by fostering the spirit of cooperation from his employees, rather than competition. That approach paid rich dividends for the Redmond, Washington-headquartered company.
Toasting Nadella's out-of-the-box approach, which vastly differed from those of other corporate honchos, Fortune named Nadella as the most underrated CEO six times consecutively.
Nadella, who has served Microsoft for 31 years, was not an unusual pick as CEO, considering his stellar performance at the company.
Nadella had joined Microsoft in 1992 and his vast organizational experience prompted him to leverage Azure, Microsoft's cloud computing division.
As the executive vice president of the company's cloud computing division, Nadella laid the path for Microsoft's deep focus on cloud computing.
In the 2011-2013 period, under the watchful guidance of Nadella, who is an electrical engineer from Mangalore University and went on to hold a Master's in computer science from Wisconsin University, Micosoft's revenues from its cloud division leapfrogged by $4 billion.
After he took over as CEO in 2014, Nadella steered Microsoft and became its most successful top honcho. In his eight years at the helm, Nadella's vision boosted Microsoft's market capitalization to $2 trillion in 2022.
Nadella's first major stint was not in Microsoft but in Sun Microsystems. In Microsoft, he initially worked on the team that developed WindowsNT, the operating system the software maker envisaged primarily for business users.
Nadella's relentless pursuit of novelties, which in turn drove high revenues for Microsoft, would have impacted the company's decision to pay him a hefty salary based on the merit of his performance.
Microsoft's 2022 filings show a whopping 96% of Nadella's salary was performance-based, a major increase from his previous year's pay package, when only 71% of his remuneration was tied to the company's financial performance.
As per the latest available company filings, Nadella took home $55 million in the financial year ended 2022. Of this, stock options accounted for $50 million and the rest was made up of bonus and other incentives.
Nadella's flexibility as a corporate leader was evident from the fact that as the CEO of Microsoft, one of his first tasks was to steer the completion of its $7.2 billion acquisition of the mobile business unit of Nokia Corp, a move which he himself had resisted internally!
The human cost of the Nokia deal would have weighed on Nadella's decision to oppose it, as is evident from the largest layoffs in Microsoft's chequered history. Nadella had to oversee layoffs which took 18,000 jobs, mostly from Nokia unit.
Nadella also oversaw another major acquisition by Microsoft – the $26 billion LinkedIn buyout in 2016.
Nadella's meteoric financial gains can be gauged from the fact that in 2013, his earnings were pegged at $669,000 and $17.6 million in stock options, a figure which surged to $40 million/per annum the next year.
In November 2021, he shed 840,000 of the 1.5 million Microsoft shares he owned, partly because his possession exceeded the requisite number of shares set by the board of directors. The move was also part of diversification of his personal portfolio.
Prized possessions
In 2001, he bought a 4,000-plus square-foot property at Clyde Hill, Washington, for $1.8 million. He made a profit of a million dollars when he sold this home in 2016.
The Nadellas now occupy another home in Seattle that they purchased in 2013 for $422,500, which has a jacuzzi, a wine cellar, and a two-story library. This residential marvel now has an estimated value of $3 million.
Nadella pursuits as a writer include a book – 'Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone '(2017) — which he co-authored with Greg Shaw and Jill Tracie Nichols.
It also offers glimpses on his life and his vision for technology and leadership.
