Microsoft’s Former CEO Set to Receive $1 Billion in Dividends in 2024
For most people, passive income is a little extra pocket change that requires minimal effort to supplement a main source of income. For Steve Ballmer, it’s $1 billion (yes, you read that right: $1 billion).
Ballmer, the world‘s sixth-richest person, will receive that amount in dividends from Microsoft in 2024. This comes after the tech giant increased its quarterly dividend payout to 75 cents per share, or $3 per share per year.
Given that Ballmer owned 333.2 million shares of the company in 2014, the equivalent of a 4% return would mean receiving only less than $1 billion in fiscal 2024. That’s simply for owning the stock, regardless of its performance.
Ballmer did not respond to a request for comment.
That’s, of course, assuming Microsoft’s board doesn’t decide to cut dividends. But that doesn’t seem likely. Since the company began paying dividends to shareholders in 2003, the amount has only increased.
Ballmer won’t be the only one taking it. Uncle Sam will also receive a generous share.
Given that Ballmer reported $656 million in income to the Internal Revenue Service in 2018, it’s probably safe to say that he will be subject to the 20% tax on dividends for people who earn taxable income of $500,000 a year or further. That means he will pay about $200 million in taxes on any Microsoft dividends he collects.
Ballmer isn’t the only one who stands to gain big from owning dividend-paying stocks.
Warren Buffet’s Berkshire Hathaway will collect $6 billion in dividends during the year, according to analysis by The Wall Street Journal. This is because most of the stocks Berkshire Hathaway invests in pay dividends. That list includes Chevron, Bank of America, Apple, Coca-Cola, Kraft Heinz, and American Express.