The guy majored in physics and computer science. There's nothing wrong with compensating people who have proven they can scale things (organizations) commensurate to their record.
He has run several multi-billion dollar units at Microsoft. Likely he had many other opportunities on the table.
Fact is it takes more than code to build something that lasts. You need to know code, understand people that write code, but there is a lot more to it than code. This guy was hired to multiply the efforts of hundreds of coders -- so all he had to do is improve each of them 5% to justify his salary.