In response to employees’ anger about the lack of raises, Microsoft CMO Chris Capossella told them to make the stock “attractive” in order to improve their compensation. The internal conversation was seen by Fortune and comes on the heels of Capossella’s sale of $4.4 million USD (about $5.9 million CAD) worth of stock.
“The most important lever for almost all our employees’ compensation upside is the stock price,” Capossela wrote. “So great quarterly results contribute to making the stock attractive, which in turn drives everyone’s total compensation up.”
A spokesperson told Fortune that Capossella’s sale of stock “is part of Chris’ personal planning and does not reflect any change in his dedication to the company’s success.” Fortune could not reach Capossella for comment.
Microsoft announced earlier this month that none of its full-time salaried employees will receive a raise this year. This includes senior management and CEO Satya Nadella. Annual bonuses given to senior leadership were also reduced. However, Fortune noted that Nadella did receive a raise last year of 10%, increasing his total compensation to $55 million USD (about $74.2 million CAD).
Inflation running at 5%
Tech workers getting no raise and cutting bonuses. If Microsoft is doing this, so are many others.
Real wages are deeply negative. https://t.co/YmPxzRqExY
— Wall Street Silver (@WallStreetSilv) May 10, 2023
Fortune detailed how internal criticism of leadership at Microsoft has grown in recent months. One employee questioned leadership about the lack of raises when Microsoft’s net income had increased by 9% year-over-year.
Though Microsoft has had massive layoffs this year, it’s also known that they are moving forward with a $68.7 billion USD (about $92.7 billion CAD) acquisition of Activision Blizzard, adding more unwelcome advertisements to Windows 11, and heavily investing in AI development. In the case of acquiring Activision Blizzard, the move was blocked by a UK regulator and Microsoft has expressed its intention to appeal.
“We are still investing heavily in our people as well as in our data center capacity to hopefully position us well for the Al transformation,” Caposella said. “The same principles apply to the senior leadership team and me. This will be reflected both in the absence of salary increases and in the level of annual performance-based bonuses for the SLT [senior leadership team], which will be substantially lower than last year. Of course, I’m not asking you to agree with the decision (these are tough calls being made during a very turbulent macro-economic environment), but I hope this helps explain a little of the rationale as to why.”