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Microsoft would rather spend money on AI than give workers a raise

At least that's what internal comments from the CMO make it sound like

Opinion If you work at Microsoft, hey, good job. Stock's up 31 percent this year and the way top brass decided to reward you was to... not reward you. But we do sympathize, especially when the CMO says this is because the company wants to "invest in the AI wave."

As The Register reported earlier in the month, CEO Satya Nadella broke the bad news in an email to staff citing the boilerplate "competitive environment" and "global macroeconomic uncertainties" as the reason why pay would be frozen for this year.

Satya Nadella

Microsoft axes 10,000, already breaking bad news to staff


That'd be a tough pill for anyone to swallow, particularly at a time when Microsoft is printing money, but the fact that Sat Nad's compensation package swelled by 10 percent to $55 million must smart.

The imbalance hasn't gone unnoticed by employees, according to internal comms seen by Insider. Writing on Microsoft's "Senior Leadership Connection" Yammer, where the rank and file can share concerns with execs, one miffed worker said:

I would appreciate hearing the rationale behind not providing any raises (merit or inflation-matching) when: 1. Inflation is so high. 2. Our net income went up compared with last quarter and last year. 3. Our CEO got a 10% raise this year. It really brings morale, motivation, and productivity down when we receive a 5% pay cut when accounting for inflation while our senior leadership is getting pay raises and while our work is continuing to drive high profits for our shareholders.

Cue chief marketing officer Chris Capossela to rub some fine-grained salt in the wound, echoing Nadella's statements with the addendum that Microsoft also wants to continue riding "the AI wave" through its multibillion-dollar partnership with OpenAI – perhaps the most visible reason for stock prices to march upward since the beginning of the year, and why the software giant is, dare we say it, almost "cool" for the first time since Windows XP.

Forgive us if we're being reductive, but it sounds like Microsoft would rather spend money on BingGPT (and Activision) than pay the people who are doing that work.

Capossela went on to say: "The most important lever for almost all our employees' compensation upside is the stock price. So great quarterly results contribute to making the stock attractive which in turn drives everyone's total compensation up."

Capossela knows all about stock – a couple of weeks ago he cashed out $2.85 million worth on top of the $1.55 million he sold the week before, bringing in a total $4.4 million, so that makes at least two Microsoft execs who are doing pretty well for themselves.

Microsoft said Capossela's "holdings significantly exceed the holding requirements set by the Microsoft Board of Directors. This sale is part of Chris' personal planning and does not reflect any change in his dedication to the company's success."

Well, yeah, not with those returns. ®

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