Microsoft’s CEO Says Pay Increases Are on the Way for Employees

Microsoft CEO Satya Nadella has told employees in a memo this week that pay increases are on the way.

In a memo on Monday the chief executive said that changes are coming to the company’s pay structure. He told staffers that the company is raising compensation as the labor market tightens and employees contend with increasing inflation.

A spokesperson for the company confirmed the pay increase, which was reported earlier by GeekWire.

“People come to and stay at Microsoft because of our mission and culture, the meaning they find in the work they do, the people they work with, and how they are rewarded,” the spokesperson told CNBC via email.

“This increased investment in our worldwide compensation reflects the ongoing commitment we have to providing a highly competitive experience for our employees.”

Last month inflation had increased 8.3%, and remains at a near 40-year high.

Nadella told employees that the company is “nearly doubling the global merit budget” and allocating more money to people early and in the middle of their careers and those in specific geographic areas.

The CEO said in the memo that the company is raising annual stock ranges by at least 25% for employees at level 67 and under. That includes several tiers in the company’s hierarchy of software-engineering roles.

Microsoft increased research and development costs in Q1, which include payroll and stock-based compensation costs, by 21%. The company increased spending in cloud engineering as Microsoft tries to keep pace with Amazon Web Services. Research and development growth has accelerated for five consecutive quarters.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.