Microsoft to Adjust Employee Compensation

Posted on May 16, 2022 by Paul Thurrott in Microsoft with 8 Comments

According to a Geekwire report, Microsoft will nearly double its annual budget for merit-based salary increases and make other compensation improvements.

“Time and time again, we see that our talent is in high demand, because of the amazing work you do to empower our customers and partners,” Microsoft CEO Satya Nadella writes in an internal memo that was obtained by GeekWire. “Across the leadership team, your impact is both recognized and deeply appreciated — and for that I want to say a big thank you. That’s why we’re making long-term investments in each of you.”

In addition to increasing its budget for merit-based salary increases, Microsoft will also increase the range of stock-based compensation by at least 25 percent for employees at the senior director level and below, the memo notes.

“Merit budgets will vary by country, based on local market data, and the most meaningful increases will be focused where the market demands and on early to mid-career levels,” Mr. Nadella explained to employees. “We are also increasing Annual Stock ranges by at least 25 percent for all levels 67 and below [meaning employees up to and including senior directors].”

The compensation changes do not impact general managers, vice presidents, and other upper-level executives.

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Comments (8)

8 responses to “Microsoft to Adjust Employee Compensation”

  1. bluvg

    "your impact is both recognized and deeply appreciated.... That’s why we’re making long-term investments in each of you."


    Not to be cynical, but no. Market conditions are the reason.

    • huddie

      Wonder if they're gonna ever hire QA testers again to make up for the 5,000-odd they let go several years ago. If they want to maintain the market edge, they need to address the failing quality of their core software, like O365 applications, O/S updates, for example. At the minute, Microsoft software just spells shoddy work.

      • james.h.robinson

        Microsoft has QA testers, they are just folded into cross-functional teams. I recommend everyone review Agile and DevOps methodologies.

        • bluvg

          I may have misread or misunderstood it, but from what I recall, devs were going to be expected to do their own QA. There are some speed benefits to this approach obviously, and there can be quality benefits from QA integrated and communicated throughout the process. But the integration and decentralization can have downsides, and there are quality benefits to a separated QA group that has QA as its sole job.

          • james.h.robinson

            For QA members of cross-functional teams, testing quality is their sole job. The older "waterfall" method where developers throw the code over the wall to the QA department is slow and does not necessarily lead to better quality software. This is why most software development companies have moved away from waterfall.

            • bluvg

              That's helpful, but are we talking about two different things? I don't think waterfall vs. agile is in dispute. I thought with devops/agile the line between QA and dev was "blurred"; I'm not a dev, and I understood that to mean an individual was responsible for both, not (necessarily) as QA as an individual's sole responsibility. Isn't it up to an org whether they have dedicated QA folks? Do you have inside info on how Microsoft does it, or is that public and I've missed it?


              Nonetheless, does that model obviate the benefit of a QA group outside of the product group? In other words, why not have both, or a blended model? Again, I'm not a dev, but there seems to be a fox-minding-the-henhouse aspect of integrated QA--not to say that it's not valuable there, but part of the value of an independent QA group is its independence. More to the point, I'm not sure that many would agree that software quality is the same under the current model.

  2. prjman

    As with the rest of the country, the question is whether these increases will keep up with inflation.

    • cynicalservices

      It will not. Merit are annual base salary increase budgeted and typically range from 2 to 3%, so high end 6 to 7% one-time increase isn't going to stay above current.


      The stock, is an annual bonus, so a one-time 25% (or greater) might offset relative to inflation, but those are you only get over a 5 year period, and given the stock market and MSFT elevated valuation, its not enough.


      This is also why there was no mention of keeping up with inflation in Satay's email, because they know it will not be for the majority.

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