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Microsoft CEO Nadella's Comments Hit Raw Nerve in Silicon Valley

"I'm absolutely reeling," said Rachel Sklar, who in 2010 founded Change the Ratio, a group focused on increasing visibility for women in tech.

Silicon Valley has come under intense criticism in recent months for hiring and promoting disproportionate numbers of white men -- making an event for women in tech the last place attendees expected to hear Microsoft CEO Satya Nadella say female employees should trust in "the system" to reward them financially at work.

Nadella made the comments at the Grace Hopper Celebration of Women in Computing on Thursday. Asked about women who would like to ask for a raise, he replied in part that women should have "faith that the system will actually give you the right raises as you go along ... that’s good karma."

The backlash was immediate, and Nadella quickly tweeted that he "was inarticulate" in his reply. Shortly thereafter he sent a memo to employees -- which Microsoft made public -- saying "I answered that question completely wrong" and "I believe men and women should get equal pay for equal work."

"I'm absolutely reeling," said Rachel Sklar, who in 2010 founded Change the Ratio, a group focused on increasing visibility for women in tech. "He put to words the massive fear women have in asking for raises and told them to trust in a system that is proven to be broken."

The debate over the lack of both ethnic and gender diversity in Silicon Valley has picked up over the past two years, underscored by incidents like tone-deaf startups that advertise the presence of women as a way to attract attendees to events.

But as Sklar pointed out, Nadella isn't the marketing exec at a no-name startup. He's the CEO of one of the giants of the tech industry, and he was speaking at a women-in-computing event.

"This was not just any CEO," Sklar said. "[Nadella] isn't an outlier. He's just the opposite. He came up through this environment -- and to become a CEO you have to advocate for yourself, not hold back."

Nadella tapped into two "zeitgeisty" issues with his comments. There's the pay gap: American women make 78 cents to their male counterparts' dollar, according to a U.S. Census Bureau report last month.

And just last week Microsoft revealed the ethnicity and gender breakdown of its workforce, which shows 29 percent of all employees are women. That figure falls to just over 17 percent women in both technical positions and leadership roles.

Adrian Granziella Larssen, the editor-in-chief of career advice website The Daily Muse, said she thinks Nadella's comments "were taken a little bit out of context."

"I think as an executive he was trying to say, at Microsoft we have this whole team of people who handle compensation, and if you deserve a raise we will give it to you," Larssen added. "Obviously it came out very wrong, very sexist."

Larssen thinks it's not only the tone but the timing that played a role: "At a time every big tech company in America is trying to get more women involved, [Nadella's comments] struck a really different chord than the rest of the conversation."

Both Larssen and Sklar, the Change the Ratio founder, said the mere fact that Nadella's comments made headlines is an improvement -- though solutions to the entrenched problems around women in tech and the wage gap remain elusive.

"I'm still bonking my head against the wall over what happens, but at least I am joined in my head bonking by lots of other people now," Sklar said.

To effect change at Microsoft, Nadella needs to instill an entirely new culture, said Cindy Gallop, an advertising consultant who has spoken frequently about equality for women.

"He's already made a huge mistake in words and he needs to put it right in actions," said Gallop, the founder of IfWeRanTheWorld and Make Love Not Porn. "He has to actively instigate a process where women can feel encouraged to speak up. You can't take this back with apologies."

In that respect, "it's a good thing he made this appalling statement and drew public attention," Gallop said. "Now it can be reviewed, challenged and reviewed again by those outside the company."

Sklar said she hopes the comments won't be forgotten quickly.

"Let's not forget he's a top mainstream tech CEO born and bred in this environment," Sklar said. "This guy is not the canary in the coal mine. He is the coal mine."