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Microsoft’s 2022 Employee Compensation Changes: Who Was Covered

Microsoft reportedly planned major changes to merit-increase budgets and stock compensation ranges in 2022. Here’s who the report said was covered—and what it does not confirm about policy today.
From TheFinanceBase Team2 min to read
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In May 2022, Microsoft reportedly planned to nearly double its annual budget for merit-based salary increases and raise annual stock compensation ranges by at least 25% for employees at senior director level and below. This is a historical report, not evidence of a new 2026 pay policy.

What did Microsoft reportedly change?

A 2022 report by Thurrott.com, citing GeekWire and an internal memo from CEO Satya Nadella, described changes to two parts of employee compensation. The original memo and GeekWire report were not independently verified here, so the figures below should be understood as reported plans, not independently confirmed implementation details.

Compensation element What the 2022 report said
Merit-based salary-increase budget Microsoft planned to nearly double its annual budget. Individual increases were not stated as a uniform percentage raise.
Annual stock compensation ranges Ranges were to increase by at least 25% for employees through level 67, including senior directors.

The two figures describe different things: the salary figure concerns the pool available for merit increases, while the stock figure concerns compensation ranges. The report does not establish that every covered employee received a raise of a particular amount.

Which employees were covered?

Employees through senior director level

The reported stock-range increase applied to employees at level 67 and below, including senior directors. The report described the change as a rise in ranges, not a guaranteed increase in every employee’s individual award.

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General managers and vice presidents

The report said general managers, vice presidents, and other upper-level executives were not covered by the changes.

How were merit increases expected to vary?

According to the 2022 account, merit budgets would differ by country based on local market data. The most meaningful increases were expected in markets with the strongest demand and for early- to mid-career employees. The report does not give country-by-country percentages, individual award amounts, or exact rollout timing.

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Does this mean Microsoft is changing pay in 2026?

No. The compensation story concerns a reported plan from 2022. Microsoft’s July 6, 2026 workforce communication announced the elimination of around 4,800 roles, about 2.1% of its global workforce, and described adjustments to resources and roles. That was a separate workforce announcement; it does not verify a new compensation-policy change.

Microsoft’s FY2025 proxy statement discusses executive compensation and company performance. It is not evidence that the employee compensation changes reported in 2022 remain in effect.

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What the report does not establish

  • The exact size of the merit budget or the raise any individual employee received.
  • How the stock ranges were implemented or how awards changed for particular employees.
  • The rollout schedule or country-level amounts.
  • Whether the reported 2022 policy is still in force.

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