Nadella's salary set at $1.2M for first year as Microsoft CEO

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Satya Nadella will get $1.2 million in salary for his first year as CEO of Microsoft, the company said Tuesday.

That’s a substantial jump on his previous salary of $675,000 and considerably more than the $700,000 earned by former CEO Steve Ballmer in Microsoft’s previous financial year. Ballmer had asked for a relatively low salary and his pay was below the average for other CEOs of similar companies.

In addition to the salary, Nadella, who is 46, will be eligible for a cash bonus of up to $3.6 million, dependent on Microsoft’s business performance. He’ll also get an additional stock award of $13.2 million starting in Microsoft’s 2015 fiscal year, the company said in a regulatory filing.

Last year, Nadella was awarded a $1.6 million cash bonus thanks to the strong performance of his business unit, which grew its revenue 9 percent year over year thanks mainly to the SQL Server and Windows Server businesses.

Nadella was named CEO earlier Tuesday, a promotion that takes effect immediately. Among the many challenges he’ll face, he’ll have to guide the company to a cloud-services business model as it seeks to better compete on the Internet. He’ll also have to make a success of Microsoft’s acquisition of Nokia’s smartphone business and support the recently launched Windows 8.1 and Windows Mobile operating systems, as part of a "mobile first, cloud first" business plan.

He won’t be working alone. Company founder Bill Gates will assume a new role as technology advisor and devote more time to assisting Microsoft and Nadella in his work.

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