CEO Satya Nadella's awkward moment couldn't have come at a worse venue, as he was given a speech before a women's group

Microsoft Corp. (MSFT) CEO Satya Nadella is less than a year into his new position, having taken the reins from Steve Ballmer in February after a lengthy selection process.  Mr. Nadella's position is a pressure cooker for certain.
Microsoft only had two CEOs in its history before him.  The first was Bill Gates who founded the company in April 1975 and held the position for two and a half decades before stepping away in 2000 to pursue a career in charity, looking to fight disease and empower impoverished developing nations.  The second was Steve Ballmer, who spent nearly a decade and a half in the top spot before agreeing to step down last year.
I. Microsoft CEO Gets a Chance to Plug Diversity -- What Could Go Wrong?
On Oct. 9, 2014, Mr. Nadella erred in a major way.  When a gaffe is so painfully bad it makes you reckon back to the fond old days of Steve Ballmer you know it's bad.  And this was that bad.
It all started seemingly innocently.
Mr. Nadella was scheduled to speak at the 2014 Grace Hopper Celebration of Women in Computing.  The conference is named after late U.S. Navy Rear Admiral Grace Hopper.  Professor Hopper earned a math Ph.D from Yale University in 1934 -- a rarity for women at the time.  She went on to teach and work on U.S. government projects.  Her most notable work includes helping to design the UNIVAC I mainframe computer and doing much of the development of COBOL, one of the first modern programming languages.
The event in her name is held annually to honor women in the tech field who distinguish themselves as researchers or executive leaders.  Aside from celebrating the achievements and merits of women in a field that has historically has had a larger than average gender gap in pay and employment numbers, the event is also a chance to preach policy.

Satya Nadella
Satya Nadella, CEO of Microsoft

While Microsoft's track record on diversity has been questioned by some due to its being the last company to publish diversity statistics on its workforce, it's no worse than its peers.  Microsoft's recent report indicates that 29 percent of its global workforce is female, in line with Google Inc.'s (GOOG) and Apple, Inc.'s (AAPL) 30 percent marks.  It should be noted, though, that those numbers include retail workers and other non-technical positions. Across all three companies the number of females working in technical positions and executive technical positions is a much lower percentage.
Microsoft has sponsored a number of groups, projects, and events designed to engage more young women in tech careers.  Among these efforts is CODESS, a prominent women coder's group that was founded by Microsoft diversity project manager Alexa Glick (@alexa_glick).

Codess Sweden
Swedish Microsoft C# MVP and coding blogger Iris Classon speaks at a CODESS event in Sweden.
[Image Source: Iris Classon]

Microsoft's CEO seemed quite eager to attend the event, which was being held at Harvey Mudd College (HMC), a prominent small liberal arts college in Claremont, Calif.  In a letter to employees he wrote:

Satya Nadella
 [Image Source: Microsoft via RE/Code]

The interviewer was Maria Klawe, a prominent female computer science professor who in 2006 was promoted to become the president of HMC and who had been appointed to the Microsoft board of trustees in 2009.  Ms. Klawe was one of the people who helped pick Mr. Nadella as CEO, so this seemed like a no-brainer for Mr. Nadella.  The interviewer would lob him soft pitches and he would smack them out of the park and then celebrate by surveying the Women's Hackathon event that Microsoft was sponsoring at the event.
II. Nadella's Gaffegate
Everything was going according to plan, until near the end of the interview.

Satya Nadella
Microsoft board member Professor Maria Klawe interviews CEO Satya Nadella at the Grace Hopper event.
[Image Source: 2014 Grace Hopper Homepage]

At that point he was asked about how women should ask for pay raises.  Without pausing he responded with a eyebrow raising off-the-cuff reply, stating:

It’s not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along.  [After doing] your best work, people recognize it, and then you get the reward.  That's good karma. It will come back.  That's the kind of person that I want to trust, that I want to give more responsibility to.

Here's a clip of the exchange.

His seeming implication that he wouldn't be inclined to give promotions to women who ask for raises drew an instant and harsh reaction from the mostly female audience. Many took to Twitter to voice their outrage. The answer even seemed to take the interviewer off guard.  She countered:

This is one of the very few things that I disagree with you on.  Here's my advice to all of you. First of all, do your homework. Make sure you actually know what a reasonable salary is.

She advised women who believe they deserve a raise to roleplay so that they have the confidence to ask for it in the right way.

The harsh reaction to his comments provoked a relatively rapid apology from Microsoft's CEO a few hours later on Twitter. And later in the day he emailed employees and posted a public memo, stating:

Today I was interviewed on stage by Maria Klawe at the Grace Hopper Conference — I encourage you to watch the video. It was great to spend time with so many women passionate about technology. I was honored to be a part of it and I left the conference energized and inspired.

Toward the end of the interview, Maria asked me what advice I would offer women who are not comfortable asking for pay raises. I answered that question completely wrong. Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap. I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it's deserved, Maria's advice was the right advice. If you think you deserve a raise, you should just ask.

I said I was looking forward to the Grace Hopper Conference to learn, and I certainly learned a valuable lesson. I look forward to speaking with you at our monthly Q&A next week and am happy to answer any question you have.

While many perceived the comments as offensive and weren't entirely satisfied with his apology, one thing's for sure -- the awkward incident has stirred up a healthy debate on related topics.
III. Understanding the Pay Gap and Different Views on "Equal Pay for Equal Work"
Some point to employment research group DICE's latest figures which indicate that the gender gap has nearly closed with women in tech earning around $87.5K USD in 2013 on average, and with men earning close to $96K USD on average.  Women were also found to be slightly more satisfied in their tech careers than their male coworkers.

DICE pay gap
[Image Source: DICE]

The numbers did indicate that men earn roughly 10 percent more than their female coworkers in the tech industry.  But the survey's authors found that was due to the two genders holding different kinds of positions, making it unclear if bias/discrimination was a factor.
Some have come to Mr. Nadella's defense pointing out that his comments may have been based on his native culture from India and misunderstood by the Western audience.  Mr. Nadella was born in Hyperbad, India in 1967 and spent a little less than half his life living in his home country before moving to the U.S. in the late 1980s to start graduate school.
Some have argued that Indian philosophy believes that karma (which Mr. Nadella's comment specifically refers to) has the greatest influence on events, so Mr. Nadella wasn't necessarily saying women shouldn't ask for raises (what it sounded like), but rather than one's "work karma" was a more important determinant of whether they got a raise at his company (what he might have meant).

Keep Calm and Karma on
Nadella, seen here speaking to Talent India students last month, is a firm believer in "karma" in the workplace. [Image Source: CollegeHealthNut (left); AP (right)]

Others point out that men aren't guaranteed equal pay for equal work either.  Sometimes, these critics argue, life isn't fair.
Such views were in the minority, with most people seeming to recognize that the statistics still show a modest institutional bias against women achieving prominent positions (the so-called "glass ceiling") -- a barrier that results in them being paid moderately less.  While the critics aren't necessarily saying that Mr. Nadella outted himself as an outright chauvinist in disguise, they argue that his comments were troubling and reiterate the sort of thinking that's kept women with drive in the tech industry from advancing further.
One thing that makes Mr. Nadella's comments more awkward is that he himself clearly has aggressively pursued top compensation.  According to Bloomberg's data, he received roughly $7.7M USD in compensation (stock, salary, etc.) last year as Microsoft's cloud computing chief.  As CEO he may make as much as $18M USD this year, between a base salary of $1.2M USD (nearly an 80% raise over his previous position), $3.6M USD in potential bonuses, and $13.2M USD in stock options.  Mr. Nadella's base salary is similar to Mr. Ballmer's base pay, which was $1.26M USD in his final full year (2013).
Mr. Nadella is also eligible to be award an even bigger bonus -- up to 900,000 Microsoft shares per period, if he delivers on shareholder equity over "each of three overlapping, five year performance periods".  USA Today reports that these preferred shares could be worth up to $300M USD.
It will take Microsoft CEO a while to live this one down.

Sources: YouTube, Microsoft [apology memo], Satya Nadella on Twitter [apology], via The Verge

"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki

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