Satya Nadella sells half of his shares back to the company


Satya Nadella, Microsoft’s CEO, sold half of his shares in the company last week, according to a document from the US Securities and Exchange Commission. Of the 1.7 million shares he owned, he sold 838,584 in the short term of two days. This sale is the largest he has made to date.

“Satya sold approximately 8,40,000 shares of his holdings of Microsoft stock for personal financial planning and diversification reasons,” a Microsoft spokesman said in a written statement, adding, “He is committed to the continued success of the company and his holdings significantly exceed the holding requirements set by the Microsoft Board of Directors.”

While the Microsoft CEO and chairman has regularly sold shares amounting to tens of millions in proceeds annually, the record high Microsoft share prices have prompted him to offload a large number of his shares to diversify his position without spooking investors. Nadella still holds on to 8,31,000 Microsoft shares, worth roughly $270 million.

Other Microsoft executives, like President Brad Smith and Executive Vice-President Judson Althoff, have also sold some of their stake in the tech giant to cash in on the high share price. Smith and Althoff had each sold shares worth $18 million earlier in November.

Analysts, however, pointed out that the sale may be related to the 7 percent long-term capital gains tax that will begin to apply from January 1, 2022, in Washington state — where Microsoft is based — for any stock sales exceeding $2,50,000 in value, reported the Wall Street Journal. The new tax is expected to earn the state $5.74 billion in additional tax revenue over the next 10 years.

Microsoft’s shares are currently up by over 50 percent year-to-date. It is one of the few companies that have a market cap of over $1 trillion. The tech giant has a market capitalization of $2.5 trillion, with rival tech giants Alphabet, Apple, Amazon, American electric car manufacturer Tesla and Saudi Aramco being the others with a market cap of over $1 trillion.

Like many top executives at some of the biggest companies in the world, Nadella is mostly paid through generous stock options. The board at the tech company recently increased his yearly compensation to $50 million a year — $33 million from stock awards, a cash bonus of $14.2 million and a base salary of around $2.5 million.