Former Microsoft CEO Steve Ballmer is set to make $1 billion a year for doing nothing
Renowned tech figure and the sixth richest person globally, Steve Ballmer, is poised to receive a substantial $1 billion in passive income from Microsoft in 2024. This windfall follows Microsoft’s decision to increase its quarterly dividend payout to 75 cents per share, amounting to $3 annually.
As of the last ownership disclosure in 2014, Ballmer, holding approximately 333.2 million shares of Microsoft, equivalent to a 4% stake, stands to accumulate nearly $1 billion in the fiscal year 2024 solely for owning the stock, irrespective of its performance.
This projection assumes that Microsoft’s board of directors maintains the current dividend rate, a scenario that appears likely given the company’s historical trend of consistently increasing dividends since their initiation in 2003.
While Ballmer has not provided comments on this development, it underscores the substantial passive income that can be generated through strategic stock ownership.
Apart from Ballmer, the substantial dividends will also contribute significantly to tax revenue. With Ballmer reporting $656 million in income to the Internal Revenue Service in 2018, it is expected that he will be subject to the 20% tax on dividends applicable to individuals earning a taxable income of $500,000 or more. Consequently, Ballmer is anticipated to pay close to $200 million in taxes on the Microsoft dividends he receives.
It’s noteworthy that Ballmer is not the sole beneficiary of lucrative dividends from stock ownership. The Wall Street Journal analysis reveals that Warren Buffet’s Berkshire Hathaway is set to collect $6 billion in dividends for the year, given the majority of stocks in its portfolio pay dividends. Berkshire Hathaway’s investments include Chevron, Bank of America, Apple, Coca-Cola, Kraft Heinz, and American Express. This emphasizes the widespread financial benefits associated with strategic stock investments that pay dividends.
