Microsoft ties cybersecurity to executive compensation after multiple security breaches

Microsoft will now be tying cybersecurity directly with executive bonuses, vice chair and President Brad Smith said on Thursday at a U.S. House committee hearing on the company’s security issues, according to a report by The Information. 

The changes indicate the software company’s willingness to address concerns around privacy and security.

Recent security breaches at Microsoft have worried officials. The Department of Homeland Security issued a report in April around an independent review of China’s breach of email accounts of U.S. government officials – an incident that the company disclosed last year.

Since then, Microsoft has said it intends to make corrections to improve issues around cybersecurity. 

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CEO Satya Nadella echoed the sentiment earlier in May, saying they were “putting security above all else,” amidst advancements in artificial intelligence. 

Smith wrote in an addendum to his testimony that employees will be judged around security too, in their twice-annual reviews with managers for the 2025 fiscal year starting July 1.

Senior execs who meet on a regular basis with Nadella will have one-third of their “individual performance” part of the bonus tied to their contribution to cybersecurity.

Additionally, a third party not yet identified will give its independent assessment.

Microsoft has been pushing cybersecurity changes since experiencing multiple foreign attacks, as well as pressure from the U.S. government.In January, a breach of executive email accounts was attributed to Russian hackers. Even though not considered severely impactful, the company had to disclose it.

Microsoft launched its Secure Future Initiative in November last year, saying it will make employees more accountable for participating in security initiatives by making it a part of their compensation.