Microsoft has revealed the compensation package of its new Chief Executive Officer Satya Nadella in a filing with the US Securities and Exchange Commission, TechCrunch reported.
The newly-appointed CEO's cash salary is $1.2 million annually. It will be paid out in installments given two times a month. He will also be eligible to get $3.6 million cash bonus which represents as much as 300% of his annual salary. In fiscal year 2015, he is set to get a target stock bonus amounting to $13.2 million. This means that for 2015, he will be receiving a total of $18 million, the report said.
TechCrunch reported that the situation is a bit more complex than what the numbers reveal. It can be recalled that Microsoft sought a new chief to head the company for the next ten years. There will be three five-year periods included in Nadella's compensation where the stock performance of Microsoft will be viewed side by side with the performance over the period of the benchmark S&P 500, the report said.
The three periods start in 2014, 2015 and 2016 and end on 2019, 2020 and 2021. According to TechCrunch, Microsoft is seeking to be in the 60th percentile of performance on index and at this percentile, Nadella is set to get 600,000 shares for each of the periods. If Microsoft does well and reaches 80th percentile or more, the new chief will be getting 900,000 shares. When the three five-year programs end, Nadella could get an aggregate of as much as 2.7 million shares, the report said.
At the current share price of Microsoft, 2.7 million shares has a value of $98,145,000. Since that award will be computed in shares that have likely gone up in value since the 2.7 million-share threshold would only be attained if the software giant expands to the larger market, Nadella will most likely get more than $100 million apart from his salary, bonuses and regular stock disbursements, TechCrunch reported.
Join the Conversation