Why Norway’s $2T Wealth Fund Just Voted Against Satya Nadella at Microsoft

The world’s largest sovereign wealth fund opposed Nadella’s dual role and pay package, citing governance and long-term compensation concerns.

At the company's annual shareholders' meeting on December 5, Norway's $2 trillion Sovereign Wealth Fund voted against important proposals involving Microsoft CEO Satya Nadella, contesting both his position as chair of the board and his pay package. A range of governance and executive pay issues were discussed during the online meeting. The fund's decisions are consistent with its long-standing opinions on executive salary and corporate governance.

The largest sovereign wealth fund in the world voted against Satya Nadella's reelection as Microsoft's board chair during the shareholders' meeting. The fund has continuously opposed governance structures where a company's CEO also holds the position of board chair, even though Nadella remains CEO. It makes the case that it applies to its whole worldwide portfolio that merging the two positions could weaken board independence and reduce accountability.

The fund voted against Nadella's pay package, highlighting its larger concerns regarding executive pay in major US companies. The fund reiterated its preference for salary structures that foster long-term alignment among executives and shareholders in its explanation of its position.

It opposed Nadella's pay package and stated that an important portion of annual remuneration should be given as shares that are locked up for five to 10 years, regardless of retirement or resignation. The result supports the fund's view that long-term shareholding rules encourage diligent decisions at the top of large corporations.

According to fund data as of June 30, it held a 1.35 percent stake in Microsoft worth around $50 billion. After AI chipmaker Nvidia, Microsoft now has the second-largest equity holding.