Steve Ballmer is set to make $1 billion a year for doing nothing
Despite possible tax issues, former Microsoft CEO Steve Ballmer is poised to collect $1 billion in passive income from Microsoft due to his substantial shareholding.
Steve Ballmer is set to make $1 billion
Microsoft will pay former CEO Steve Ballmer an incredible $1 billion passive income in 2024. He will receive this enormous cash because Microsoft has increased dividends. Ballmer holds 333.2 million Microsoft shares, or 4% of the firm. This ownership gives him a share of Microsoft’s income as dividends regardless of market performance. Since 2003, Microsoft has boosted dividend payments, making it unlikely to cut them.
This large income has a downside: taxes. After reporting his income to the IRS, Ballmer may have to pay $200 million in taxes on these profits. Dividends are taxed at 20% for those earning $500,000 or more. This is making Ballmer and others rich. Warren Buffett’s Berkshire Hathaway will receive $6 billion in dividends this year. Berkshire Hathaway invests in Chevron, Bank of America, Apple, Coca-Cola, Kraft Heinz, and American Express, which pay significant dividends.
This shows how owning many major firms’ stocks may generate huge passive income. It also indicates the high taxes Ballmer may have to pay on these gains. The benefits of owning such stocks and the tax implications are balanced.
American business entrepreneur Steve Ballmer was Microsoft’s CEO from 2000 to 2014. Born in Detroit, Michigan, in 1956, he earned a degree in mathematics and economics from Harvard. He quit Stanford Business School in 1980 to become Microsoft’s 30th employee.
Ballmer helped the company grow and succeed, especially with MS-DOS. He became Microsoft president in 1998 and CEO in 2000. As CEO, he launched Windows XP, Xbox, and Zune. The CEO resigned in 2014. Ballmer has donated and invested after leaving Microsoft. He owns the NBA’s Los Angeles Clippers and co-founded the nonprofit investment organization Ballmer Group. He is a major Microsoft stockholder. CEO Ballmer is one of the most successful. He is known for his drive and energy and helped Microsoft become a global tech giant.
Due to Microsoft’s 56% stock price growth, its share has grown to $130 billion, a $44 billion boost in wealth this year. Passive income contributed significantly to Steve Ballmer’s riches. In 1980, Steve Ballmer became the 30th employee and accumulated a large interest. Microsoft CEO since 2000, he resigned in 2014.
Stake ownership has Steve Ballmer close to becoming the fourth richest person in the world, only behind Larry Ellison and Bill Gates. Microsoft paid $2.79 per share in dividends in 2023, giving Mr. Ballmer $930 million annually based on his holdings. Microsoft upped its dividend by 10% to $3 per share in 2024, estimating a $999.6 million yearly payment for Mr. Ballmer.
Microsoft has raised its dividend for 18 years, so Mr. Ballmer’s payout may exceed $1 billion in 2024 and increase. Mr. Ballmer may also be subject to the 20% dividend tax for anybody earning over $500,000. This suggests he may pay $200 million in taxes on Microsoft dividends. Since leaving, Bill Gates has shifted his wealth from Microsoft to cash and public equities. Mr. Gates had 330 million Microsoft shares, or 4% of2014. After years of divestitures, Bill Gates owns barely over 1% of the software behemoth.
