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'Help improve stock price to get hikes' — Microsoft CMO tells employees after company pauses pay raises
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'Help improve stock price to get hikes' — Microsoft CMO tells employees after company pauses pay raises
May 21, 2023 11:26 AM

Microsoft's chief marketing officer (CMO) Chris Capossela recently told his employees of a way to get a pay raise — by working to get the stock of the company up, Fortune reported.

Microsoft has decided to not give its employees salary hikes this year, which has angered a lof of its employees.

"The most important lever for almost all our employees’ compensation upside is the stock price," Fortune quoted Capossela as saying, adding, "So great quarterly results contribute to making the stock attractive, which in turn drives everyone's total compensation up," he said.

He told his employees that the company still continues to invest heavily in its people and it its data center capacity to hopefully position it well for the AI transformation.

Also Read: Gen Z gets keener on side hustles as layoffs continue — 46% hold second jobs

Earlier this month, Microsoft announced its decision to forgo salary increases for full-time employees. This decision fueled by slowing revenue growth and a need to reduce costs, left many employees disheartened and frustrated. Among those expressing their disappointment was Isabela Moreira, a senior software engineer at Microsoft, who took to social media to describe the decision as a "slap in the face."

Microsoft's CEO, Satya Nadella, conveyed the news of the salary freeze through an internal email to employees.

“We will maintain our bonus and stock award budget again this year, however, we will not overfund to the extent we did last year, bringing it closer to our historical averages,” Nadella wrote in the email.

This move further comes after Microsoft's January announcement of job cuts, affecting approximately 5 percent of its workforce or 10,000 employees. This signals a broader strategy to streamline operations and mitigate financial challenges which has made the tech giant adopt a more cautious approach to compensation.

Additionally, Microsoft nearly doubled the budget for merit hikes and increased stock allocations for some employees last year as inflation spread throughout the economy. Compensation will appear more typical this year.

Top Microsoft executives' performance bonuses, according to Nadella, will be significantly lower than they were the previous year.

Also Read: Microsoft earnings beat and upbeat

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