Xbox Misses Microsoft's Executive Pay Target for the Fifth Time in Six Years
Microsoft's Xbox division has missed a performance goal tied to executive pay for the fifth time in six years. Microsoft's top named executives, a group that has included CEO Satya Nadella and CFO Amy Hood, have had one…
Microsoft's Xbox division has missed a performance goal tied to executive pay for the fifth time in six years. Microsoft's top named executives, a group that has included CEO Satya Nadella and CFO Amy Hood, have had one Xbox-related metric in their pay packages since 2020. According to Game File, which went through Microsoft's new proxy statement filed on October 21, the fiscal 2026 target was 4.3% growth in Xbox content and services revenue. Instead, that revenue fell 6% by the compensation measure, while the proxy's own business highlights put the drop at 5%. The miss caps a rough year for the division, which saw its revenue slide and later announced plans to lay off 3,200 workers as part of a year-long reset.
The target metric itself has shifted over the years. It started as Game Pass subscriber growth, which Xbox missed in 2021 and 2022, then switched to content and services revenue growth in 2023, which Xbox missed that year and again in 2024. Fiscal 2025 was the lone exception, with Xbox growing that revenue by just under 15% against a target of more than 14%. Of course, the Xbox goal is only a small slice of the pay package. Nadella's total compensation for fiscal 2026 came in at roughly $90.6 million, down from about $96.5 million a year earlier, though the filing doesn't pin that dip on Xbox. CEO Asha Sharma has denied divestment rumors and said Microsoft will take the long-term view, so it's reasonable to expect the turnaround to take more than one fiscal year.
The target metric itself has shifted over the years. It started as Game Pass subscriber growth, which Xbox missed in 2021 and 2022, then switched to content and services revenue growth in 2023, which Xbox missed that year and again in 2024. Fiscal 2025 was the lone exception, with Xbox growing that revenue by just under 15% against a target of more than 14%. Of course, the Xbox goal is only a small slice of the pay package. Nadella's total compensation for fiscal 2026 came in at roughly $90.6 million, down from about $96.5 million a year earlier, though the filing doesn't pin that dip on Xbox. CEO Asha Sharma has denied divestment rumors and said Microsoft will take the long-term view, so it's reasonable to expect the turnaround to take more than one fiscal year.