Microsoft's ratio is higher than the median ratio for other reporting companies, but lower than that of companies with similar revenue.
Microsoft CEO Satya Nadella was paid $25.8 million last year — 154 times the median amount made by an employee at the Redmond company.
Microsoft’s median employee pay was $167,689 during the company’s fiscal 2018 year, which ended in June. That figure is based on what Microsoft’s 135,000 employees made, including base salary, bonuses and stock awards but not including any health care benefits.
Under a new federal rule, companies have to report each year the ratio of the top executive’s pay to median employee pay. The rule’s aim was to promote more transparency on Wall Street but has proved to be somewhat controversial. Some see it as a way to hold companies accountable over their treatment of employees, while others say it is complicated by too many factors to mean much.
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Microsoft is one of the last to report its CEO pay ratio because of its fiscal calendar. Its ratio is higher than the median ratio for other reporting companies, but lower than that of companies with similar revenue.
Equilar found in a wide-ranging survey of companies that the median is a 140-to-1 ratio. That number grows to 263-to-1 for companies with more than $1 billion in revenue. Microsoft reported $110.4 billion in revenue last year.
In the technology industry, Nielsen Holdings had the highest ratio, at 475-to-1, according to data from Bloomberg. At the lower end of the tech scale, Take-Two Interactive reported a 0.75-to-1 ratio, largely because its CEO takes a $1 base salary.
Microsoft’s 154-to-1 ratio looks bloated compared to the 59-to-1 ratio from fellow local tech giant Amazon. Even though Amazon’s warehouse-heavy employee base has median pay of just $28,446, CEO Jeff Bezos was paid a salary of only $1.7 million, a low number for the industry.
Other local companies’ pay ratios ranged widely — including a 431-to-1 ratio at Expedia, where the median employee pay is $71,696 and first-year executive Mark Okerstrom made $30.7 million; and an 18-to-1 ratio at Tableau Software, where a high median pay of $199,864 was balanced out by relatively low pay for CEO Adam Selipsky of $3.5 million.
Nadella’s 2018 pay increased by 29 percent over the previous year, when he made just more than $20 million. The increase was mostly due to increased stock awards, tied to the company’s performance.