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Nadella's rapid apology limits fallout from sexist gaffe

Aaron Pressman

Microsoft (MSFT) CEO Satya Nadella joined the unfortunate club of offensive executives this week, after he offered the boneheaded advice that women who want higher pay shouldn’t ask for a raise. But his rapid and total apology separated him from some previous CEO offenders and should mitigate any fallout.

"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," Nadella said, as if he was unaware of the substantial pay gap between men and women of equal qualifications in the technology industry.

"That's good karma. It will come back," Nadella added, as the audience at the Grace Hopper Celebration of Women in Computing conference sat silently.

Criticism was swift and fierce, starting with Harvey Mudd College president Maria Klawe, who was Nadella’s questioner on stage and sits on the Microsoft board.

“This is one of the very few things I disagree with you on,” Klawe replied, prompting applause. She recommended that women ask for raises after researching appropriate pay levels and even practice roleplaying the conversations in advance. “Practice asking them for the salary you deserve,” she said, as Nadella nodded in agreement, saying “that’s right, that’s right.”

Others pointed out that the answer reflects the precise kind of cluelessness about gender inequality that perpetuates a discriminatory system. Women in technology fields earn only 89% as much as men, even after controlling for education, age, race and hours worked, according to a study by Harvard University economist Claudia Goldin. Other surveys have found an even larger pay gap.

Nadella quickly backtracked, first with a short apology on Twitter and later with an email to all Microsoft employees that was posted on the company’s web site.

“I answered that question completely wrong,” Nadella wrote, adding: “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.”

Nadella is far from the first CEO to offend.

Lululemon (LULU) former CEO Dennis “Chip” Wilson resigned as chairman last year after commenting about the company’s see-through yoga pants and other quality questions. “Quite frankly some women’s bodies just actually don’t work for it,” he said during an interview with Bloomberg TV.

AOL (AOL) CEO Tim Armstrong survived his offensive remarks, after he publicly blamed a change to the company's 401(k) benefits on health care expenses from the pregnancies of two employees who had "distressed babies." Armstrong quickly restored the retirement benefit and said: "I made a mistake and I apologize for my comments.”

Abercrombie & Fitch (ANF) CEO Mike Jeffries was stripped of his role as chairman in January, in part because of poor performance, but also after a controversy arose over comments he had made about undesirable customers. “We want to market to cool, good-looking people. We don’t market to anyone other than that,” Jeffries said in a 2006 interview that resurfaced in 2013. “A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely."

And Mozilla CEO Brendan Eich was forced to resign in April after it came to light he had donated $1,000 to an anti-gay marriage ballot initiative in California several years ago.

Nadella’s gaffe didn’t rise to the same level of controversy, not least because he had spoken at length earlier in the same interview about steps Microsoft was taking to recruit more women. After Klawe asked about the company's top ranking women, Nadella mentioned several female executives, including CFO Amy Hood and Julie Larson-Green. “We have many, many strong leaders across the company who are making a huge difference," Nadella said. "I absolutely expect one of them one of these days to be sitting in this chair.”

The software giant recently disclosed that only about 30% of its workforce – and only 17% of people in technical positions – were women, comparable to figures released by other major technology companies. None of the companies have disclosed pay differentials.

Nadella’s apology also went much further than most corporate retractions, which often try to place blame on those who are offended instead of, or in addition to, admitting a mistake.

For example, Abercrombie’s Jeffries waited months to apologize after his comments resurfaced, finally issuing a statement which included the blame-the-offended line: “I sincerely regret that my choice of words was interpreted in a manner that has caused offense.”

And Intel (INTC) recently issued a mixed apology after finding itself on the wrong side of a debate over sexism in video games. The company pulled its advertising from Gamasutra, a leading gaming web site that had published articles criticizing the sexism of gaming culture. The move came just after a group defending gaming culture (and attacking Gamasutra) had called for an advertiser boycott.

Intell didn't restore the ads and issued an apology for offending. “We recognize that our action inadvertently created a perception that we are somehow taking sides in an increasingly bitter debate in the gaming community. That was not our intent, and that is not the case," Intel wrote. "We apologize and we are deeply sorry if we offended anyone."

(Update: This story was updated on October 15, 2014 to clarify that Chip Wilson resigned as chairman of Lululemon last year and that his remarks occurred during an interview about quality issues with the company's products.)