Microsoft CMO tells employees the stock price is the ‘most important lever’ to get a pay raise after cashing out on $4.4 million worth of stock this month

Microsoft’s chief marketing officer Christopher Capossela, who just cashed out $4.4 million worth of stock, told employees angry about lack of salary raises that their best way to increase their pay is to make the stock go higher, according to screenshots of an internal conversation viewed by Fortune.

“The most important lever for almost all our employees’ compensation upside is the stock price,” Capossela wrote in a chat with employees last week on an internal social networking tool called Yammer. “So great quarterly results contribute to making the stock attractive which in turn drives everyone’s total compensation up.”

Microsoft told employees earlier this month that, due to economic conditions, the company will not provide raises for full-time salaried employees. This comes after the company announced it would layoff 10,000 employees through the end of March (thought some some reports are finding Microsoft is still making cuts past its self-mandated deadline).

“Our current employee count is around 250k people which is a large increase year over year. So the painful job eliminations and the difficult decision to not increase salaries this year has the effect of slowing down a large increase in our people investments,” Capossela wrote in another message to staff on Yammer on Tuesday (A Microsoft spokesperson told Fortune that the most recent disclosed headcount is actually 221,000). “We are still investing heavily in our people as well as in our data center capacity to hopefully position us well for the Al transformation.”

With company morale bruised by cost cutting, internal criticism of Microsoft management is growing, particularly among employees who feel the burden is not being shouldered equally between workers and executives. Microsoft CEO Satya Nadella received a 10% pay raise in 2022, raising his total compensation to $55 million.

Last week, Capossela sold $2.85 million worth of stock, adding to the $1.55 million worth of shares that he sold the week prior, MarketWatch reported. According to a filing with the Securities and Exchange Commission, the CMO sold a total of 5,000 shares last Tuesday at an average price of $308.705 and on Wednesday, he sold another 4,177 shares at an average price of $312.905. None of the stock sales were through pre-arranged stock trading plans, which Microsoft does not require of its executives in contrast to many other companies.

A Microsoft spokesperson said that Capossela was not available for comments, and said that 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.”

According to screenshots of the conversation viewed by Fortune, an employee asked leadership what the rationale was behind not providing raises for employees given that Microsoft’s net income in the most recent quarter increased 9% year-over-year. Microsoft is also pouring massive amounts of money into A.I. technology and on acquisitions such as the pending $69 billion purchase of Activision Blizzard.

“The same principles apply to the senior leadership team and me. This will be reflected both in the absence of salary increases and in the level of annual performance-based bonuses for the SLT [senior leadership team], which will be substantially lower than last year,” Capossela wrote in response to one questioner in the chat. “Of course, I’m not asking you to agree with the decision (these are tough calls being made during a very turbulent macro-economic environment), but I hope this helps explain a little of the rationale as to why.”

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Microsoft CMO tells employees the stock price is the ‘most important lever’ to get a pay raise after cashing out on $4.4 million worth of stock this month

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