- Microsoft plans to restart performance-based raises for some employees.
- This compensation adjustment follows a year marked by internal dissatisfaction over pay.
- Microsoft's annual review cycle started in April.
After freezing salaries last year, Microsoft plans to restart performance-based raises for some employees during this year's review cycle, which started in April.
The plans haven't been announced companywide, but Scott Guthrie, the executive vice president of Microsoft's cloud and AI group, said at an April 30 employee meeting that merit raises would increase this year, according to two people present. Microsoft calls performance-based raises "merit increases."
Though the generative-AI hype has propelled Microsoft to a $3 trillion valuation, making it the world's most valuable public company, it's generally been a rough year for employees.
In 2022, Microsoft granted an across-the-board compensation raise for employees at levels 67 and lower through larger stock grants. This was done in response to growing internal dissatisfaction with compensation and to stop employees from going to companies such as Amazon for better pay. But those raises were considered by some to be underwhelming. Nvidia also recently boosted employees' stock awards by 25% with a one-time grant.
Last spring, after significant layoffs across the tech industry, Microsoft froze base-pay raises and cut its budget for bonuses and stock awards. The decision was repeatedly blasted by many employees internally.
Microsoft's annual review cycle began with a performance review in April. Notifications about how performance affects compensation are set to begin around August 15, and the payout around September 15.
A Microsoft spokesperson didn't respond to a request for comment from BI.
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