(USA TODAY) - Satya Nadella, Microsoft's newly appointed CEO, is getting a serious pay bump.
Nadella will receive a $1.2 million salary, nearly 80% above what he was paid as a division head in 2013, according to a company filing late Tuesday. He'll also get a stock award worth $13.2 million and is eligible for an annual bonus up to $3.6 million. Overall, he could receive about $18 million as a first-year CEO, more than double what he received as head of the Microsoft's cloud computing operation in 2013.
The compensation kicker is a potential equity award based on five year performance periods starting next year. Tied to Microsoft's stock gains, that could be eventually worth more than $300 million. Microsoft says Nadella could receive up to 900,000 shares based on performance over "each of three overlapping, five year performance periods" based on total shareholder return.
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According to Microsoft's 2013 proxy, Nadella, 46, received compensation valued at about $7.6 million last year, including a $669,167 salary, $1.58 million bonus and $5.4 million stock award. Nadella gained another $4.9 million from previously awarded shares that vested. He holds another 454,000 shares, worth $15.6 million, that have not yet vested.
Outgoing CEO Steve Ballmer received compensation valued at $1.26 million last year. But as of Microsoft's last proxy filed in October, Ballmer held 333.2 million shares. At Tuesday's $36.35 close, Ballmer's shares - 4% of Microsoft's shares - are worth more than $12.1 billion.
Compared to current compensation plans in Corporate America - particularly tech companies - Nadella's potential payouts and annual compensation isn't over the top - except, perhaps to Main Street. When Apple elevated Tim Cook to replace the late Steve Jobs in 2011, he received restricted stock then valued at about $376 million.
Outside hires don't come cheap, either. Former Google executive Marissa Mayer, lured to Yahoo in July 2012, signed on with the potential to make over $100 million within five years. She received an up-front retention award worth $30 million, a "make whole" stock grant valued at $14 million to cover what she forfeited leaving Google, and her contract calls for an annual stock award worth $12 million.
In 2011, retailer J.C. Penney lured Apple retail store chief Ron Johnson with a stock award valued at $50 million. The struggling retailer ousted Johnson before the shares vested.