The compensation committee said it reduced Mr Nadella’s cash pay by more than half, to $5.2m.
That represents less than 7% of his total pay.
The bulk of his pay, $71.2m, was made up of stock options.
High Pay Centre director Luke Hildyard said “superficially” the earnings made sense given Microsoft’s strong financial performance.
“However, we might also ask whether the extra $79 million on top of $49 million last year for someone who is already worth hundreds of millions, with more money than they could spent over multiple lifetimes of absolute luxury, is really necessary as a reward of incentive,” he told the BBC.
“None of Microsoft’s success would be possible without workers, customers and wider society so perhaps the proceeds of that success should be share a little more evenly,” he added.
Elsewhere in big tech, Apple boss Tim Cook earned $63.2m in 2023, while the chief executive of the world’s most valuable company Nvidia, Jensen Huang, was paid $34.2m in the 2024 fiscal year.
But none of them come close to Tesla boss Elon Musk, whose pay packet could be worth up to $56bn.