'Good Karma' Nadella's big payday offers cold comfort

The Microsoft CEO may face criticism over his pay package, given his recent comments on women's compensation but it may be time to cut him some slack

This is a case of spectacularly bad timing. Satya Nadella has been given a compensation package of around $84.3 million by Microsoft. The disclosure, made on Monday, is the news of the day. And it comes just as Nadella is still trying to douse the controversy over his remarks on women asking for salary hikes. He had said that asking for a pay raise could lead to bad “karma”. Multiple apologies have not worked so far. Now Nadella has this massive salary figure of $84.3 million to defend. Oops!

 

“Good payday karma for Microsoft chief,” is how the Financial Times wryly headlined its report. “Satya Nadella, the Microsoft chief executive, who created a storm by telling women that they should not ask for more money, has been given a compensation package worth an estimated $84.3m, according to a regulatory filing late on Monday,” the FT wrote. 

 

Nadella’s unfortunately chosen words on women asking for raises comes on the heels of a recent trip to India, which itself had its hiccups when Nadella faced microphones. It was his first visit to his home country after becoming the CEO of the world’s largest technology company. When Microsoft announced that Nadella was to be CEO, the Indian press gave the development almost dizzying coverage. But, he was too busy to give any one on one interviews on his recent trip to India and his press conference was over in 20 minutes flat. I was among the many journalists who was hugely disappointed. 

 

The incident is still very fresh. And I am a woman. Still, I will not utter the ‘chau**nist’ word to describe Nadella. Perhaps, he was talking about both the genders when he said that one should have faith in the system. If you deserve it, you will get the “right raise”. And the man has profusely apologised. 

 

Just a few hours before Microsoft made disclosures about Nadella’s pay, he had said at a conference, “The last week and a half or so have been a learning and humbling experience for me. I was wrong in the way I answered that one question.” He went on to say that he was advised early on in his career to stop asking for a promotion and he has been “lucky” with his own pay. This is what made him unaware of a large concern among working women employees about wage discrimination. “I took my own experience . . . and sprung it on half of humanity,” he said self deprecatingly.

 

It only makes things worse for Nadella that Microsoft’s close competitor Facebook’s chief operating officer, Sheryl Sandberg, has been a forceful proponent of the mantra of ‘ask for a raise if you deserve it.’

 

Still I hope Sandberg and the rest of the humanity cut Nadella a little slack on this one. As far as his own ‘whopping’ pay is concerned, let’s do some math. 

 

Out of the $84.3 million package, $59.2m is in stock that will be paid out over seven years. He also received a one-time retention award worth $13.5 million.

 

But, Nadella will only get the first payment from the stock after five years and rest over the next two years. And he will qualify for the stock only if Microsoft outperforms 60% of the Standard & Poor’s 500 Index. 

 

For Microsoft’s current fiscal year, Nadella’s compensation package is around $18 million which consists of a salary of $1.2 million, cash bonus of three times base pay and a stock award worth $13.2 million. 

 

Meanwhile, Sandberg, was paid $16.2 million in cash and stock in 2013, despite a $10 million pay cut from 2012. In the previous year, Sandberg drew $26.2 million versus about $40 million in 2011. 

 

Perhaps, Sandberg is right: asking does help. 

 

(Surabhi Agarwal covers technology for Business Standard)