Why top Microsoft investor voted against CEO Satya Nadella

Norway fund challenges Nadella’s leadership roles

Norway’s $2 trillion Sovereign Wealth Fund has cast votes against key proposals involving Microsoft Chief Executive Officer Satya Nadella, challenging both his role as chair of the board and his compensation package at the company’s annual shareholders’ meeting on December 5. The meeting, held virtually, reviewed a range of governance and executive pay issues. The fund’s decisions reflect its long-standing stance on corporate governance and executive remuneration, according to Times of India.

At the shareholders’ meeting, the world’s largest sovereign wealth fund voted against the re-election of Satya Nadella as chair of Microsoft’s board. While Nadella continues as chief executive, the fund has consistently opposed governance structures in which a company’s CEO also serves as board chair. It argues that combining the two roles can weaken board independence and dilute accountability, a position it applies across its global portfolio.

The fund also voted against Nadella’s compensation package, reinforcing its broader concerns about executive pay levels in major US companies. In explaining its position, the fund reiterated its preference for remuneration structures that promote long-term alignment between executives and shareholders. “A substantial proportion of annual remuneration should be provided as shares that are locked in for five to ten years, regardless of resignation or retirement,” it said while opposing Nadella’s pay package. The vote underscores the fund’s view that long-term shareholding requirements encourage more responsible decision-making at the top of large corporations.

Norway’s Sovereign Wealth Fund is managed by Norges Bank Investment Management and is one of the most influential institutional investors worldwide. As of June 30, it owned a 1.35% stake in Microsoft valued at around $50 billion, according to fund data. This makes Microsoft its second-largest equity holding after AI chipmaker Nvidia. Based on LSEG data, the fund is also Microsoft’s eighth-largest shareholder, giving its votes particular significance, even when they do not change the final outcome.

Despite the opposition from Norway’s fund, Microsoft shareholders overwhelmingly approved all company-backed proposals. This included the advisory vote on executive compensation, signalling strong investor confidence in Nadella’s leadership. Shareholders endorsed a compensation package worth $96.5 million for fiscal 2025, a record high for the Microsoft chief executive.

The increase in pay was largely driven by stock awards linked to Microsoft’s strong market performance. Shares rose about 23% in 2025 and have doubled over the past three years. According to regulatory filings, Nadella’s pay represents a 22% increase from the previous year, with the company’s board citing exceptional progress in artificial intelligence as a central reason for approving the package.