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A Senior SDE at Microsoft makes ~~$332k/year~~ US$241k/year. Median income per person in the USA is $42,800/year.

https://www.levels.fyi/companies/microsoft/salaries/software...

You're solidly upper class if you work at big tech. Nadella isn't trying to lead people making $42,800/year where a 6.5% decrease in salary can literally be the difference in homelessness. He is trying to lead wealthy software developers where $20k is painful but not life-altering.

It's a bigger issue that the median American salary leaves practically no room for someone to cut their income due to performance. If the only way to survive is to constantly lie about your performance to get an extra couple of bucks, people will do that regardless of what the CEO says or does.

Ideally, we would live in society where everyone had slack in their compensation. This would let more CEOs lead by example.

1 comments

Your link shows seniors making $241k, not sure where you got $332k from.

The point is, even people making $241k will feel a 6.5% decrease in pay astronomically more than someone going from $84m to $79m. At that level there is negligible drop in quality of life, and the concept of "cutting back" pretty much does not exist.

This is still a performative act, the intention is nice, but it's performative nonetheless.

Sorry, I had it set to Canadian loonies and got inflated numbers.

Economists assume utility of money is logarithmically proportional to the amount, so losing a certain % of one's wealth hurts the same at every level.[1] Nadella made $84 million and is worth $1.4 billion according to the internet. For a $20k pay cut to hurt the same as a $5 million one, you'd need to have a net worth of x where (5000000/1400000000)x=20000 -> x=$5,600,000. For a $2772 pay cut---which is 6% of the median US salary---to hurt as much, you'd need $776,000 in wealth.

The median net worth is actually more like $192,700. So Nadella would have to give up (2772/192,700)*1400000000=$20 million to feel the pain of the median American giving up 6% of their income. That's quadrice what he actually did give up, but it still wouldn't result in his TC declining, since his pay rose by $30 million this year.

[1]https://economics.stackexchange.com/questions/23952/is-the-u...