The gaming division of software giant Microsoft has had a turbulent year, but the company’s stocks surged – much to the delight of the CEO.
In a document submitted to the U.S. Securities and Exchange Commission on October 24, 2024, Microsoft provides insights into the fiscal year 2024, which ran from July 2023 to June 2024.
During this period, the completion of the acquisition of Activision Blizzard in October took place – but also studio closures and layoffs. In the end, a substantial raise for the CEO resulted.
- Satya Nadella, Microsoft’s CEO, requested a pay cut following a security breach.
- Nevertheless, he received nearly 80 million US dollars for fiscal year 2024, nearly 60% more than the previous year.
- However, the company closed several of its gaming studios and laid off 2,500 employees in the same year.
In fiscal year 2024, Microsoft finally managed to push through the acquisition of Activision Blizzard for $69 billion.
Microsoft makes profits with AI, but layoffs occur in gaming
What’s with the pay cut? Nadella requested a reduction in his cash compensation due to several cybersecurity incidents that were reported in fiscal year 2024. This generally includes base salary, as well as overtime pay and bonuses.
The company disclosed in July 2023 that Chinese hackers had gained access to Microsoft-based email accounts of U.S. government members.
According to the documents, Nadella took only about half of the 10.7 million dollars he was entitled to – “only” 5.2 million dollars. However, the overall substantial gain for the CEO is due to his stock allocations.
Where does the “raise” come from? The much larger portion of the CEO’s compensation comes from stock allocations, meaning shares in the company.
In 2023, these stock allocations for Nadella amounted to 39 million dollars; however, in fiscal year 2024, Microsoft stocks increased by about 31.2%. For the CEO, this means stock allocations amounting to 71 million dollars. In total, his compensation was even 79.2 million dollars – representing a 63% increase compared to the previous year.
How did things go elsewhere at Microsoft? Especially in Microsoft’s gaming division, the last fiscal year was turbulent. Just a few months after the acquisition of Activision Blizzard, 1,900 employees were laid off, followed by further studio closures and layoffs. We have reported on this at MeinMMO:
Since Nadella took over as CEO at Microsoft in 2024, the company is said to have nearly tripled its revenue to 245 billion dollars, and its net profit reportedly increased nearly fourfold to 88 billion dollars, according to the report.
Additionally, Microsoft reached a market capitalization of more than 3 trillion dollars in January, making it one of the most valuable companies in the world. Especially in the field of artificial intelligence, the tech giant has invested diligently, which seems to have paid off.
While some layoffs are to be expected with an acquisition as large as that of Activision Blizzard, these figures are likely to leave a sour taste for some of the former employees: Engineer recounts how his dream job in gaming died: ‘Was fired after 13 years at Blizzard’
