Microsoft is now tying Satya Nadella’s pay to LinkedIn’s performance

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Microsoft CEO Satya Nadella speaks at an Economic Club of Chicago dinner in Chicago on Oct. 3, 2018.

Two years after Microsoft paid $27 billion for LinkedIn, its most expensive acquisition ever, the company is tying the professional networking site’s performance to CEO Satya Nadella’s compensation.

Microsoft said in a regulatory filing earlier this week that activity on LinkedIn will be one factor in how much Nadella and four other top company executives, including Chief Financial Officer Amy Hood, get paid. It’s the latest evidence that Microsoft considers LinkedIn a highly important asset as the company seeks new growth channels outside of its core software businesses.

According to the filing, the “number of times logged-in members visit LinkedIn, separated by 30 minutes of inactivity,” on desktop and mobile devices will be evaluated over a three-year period to help determine the number of performance stock awards (PSAs) that get doled out to Nadella, Hood and the other executives — Jean-Philippe Courtois and Peggy Johnson, who are both executive vice presidents, and Chief Legal Officer Brad Smith.

Not included in that group are LinkedIn CEO Jeff Weiner or billionaire co-founder Reid Hoffman, who sits on Microsoft’s board.

Nadella earned $25.8 million for fiscal year 2018, from a combination of salary, bonus and stock awards. PSAs, one type of equity award, accounted for 32.5 percent of his total pay, and also represented a significant percentage of compensation to the other executives.

While LinkedIn performance is already being tracked, the payout related to LinkedIn sessions won’t be made until 2020 and will be based on three-year performance.