Former Microsoft CEO Steve Ballmer is poised to receive a substantial $1 billion in annual dividend payments from the tech giant, showcasing the lucrative returns from his significant stake. As the largest individual shareholder in Microsoft, Ballmer’s ownership of approximately 4% of the company translates to around 333.2 million shares. This sizable stake has surged in value to about $130 billion, representing a remarkable $44 billion increase in wealth within the current year, driven by a notable 56% rise in Microsoft’s stock price.
Ballmer, who holds the position of the sixth richest person globally, has amassed considerable wealth from his tenure at Microsoft, where he joined as the 30th employee in 1980 and later served as the CEO from 2000 to 2014. His impending $1 billion annual dividend payments contribute significantly to his overall wealth and bring him close to becoming the fourth richest person globally, trailing behind Larry Ellison and his former colleague Bill Gates.
In 2023, Microsoft distributed dividends of $2.79 per share, resulting in an annual payment of around $930 million to Ballmer based on his ownership. For the year 2024, Microsoft has increased its dividend by 10% to $3 per share, projecting a potential annual dividend of $999.6 million for Ballmer. Given Microsoft’s consistent dividend growth for 18 years, it is likely that Ballmer’s annual payout will surpass $1 billion in 2024 and continue to rise.
However, it’s worth noting that Ballmer will likely be subject to a 20% tax on dividends for individuals earning over $500,000 annually. This implies that he might need to pay around $200 million in taxes on the dividends received from Microsoft.
While Ballmer continues to benefit from his Microsoft holdings, his former colleague Bill Gates has significantly diversified his wealth away from the company. In 2014, Gates held approximately 4% of Microsoft, amounting to a stake of 330 million shares. However, over the years, Gates has undertaken a series of divestitures, resulting in his current ownership of just over 1% in the software giant. This strategic diversification reflects Gates’ evolving investment approach and financial management.
In summary, Steve Ballmer’s substantial annual dividend payments from Microsoft underscore the lucrative returns from his substantial stake in the tech giant, adding significantly to his wealth and positioning him among the world’s wealthiest individuals.
