Ex-Microsoft CEO Steve Ballmer to earn $1bn annually doing nothing
What's the story
Steve Ballmer, former Microsoft CEO and currently the world's sixth richest person, is on track to receive almost $1 billion (Rs. 8,323 crore) in dividends from the tech behemoth in 2024.
This comes after Microsoft's decision to raise its quarterly dividend to 75 cents per share, amounting to $3 per share annually.
As of 2014, Ballmer held 333.2 million Microsoft shares, equivalent to a 4% stake, and has not made any changes to his holdings since then.
Details
Dividend history and tax implications
Microsoft has been steadily increasing its dividend payouts to shareholders since 2003.
Individuals earning a taxable income of $500,000 a year or more are liable for 20% tax, as per US tax laws.
Ballmer's reported income in 2018 was $656 million, so it is safe to say that he is likely to face a 20% tax on his dividends.
That means he will pay close to $200 million in taxes on the Microsoft dividends he collects.
What Next?
Other investors benefiting from dividends
Ballmer isn't the only investor poised to make substantial earnings from dividend-paying stocks.
According to a Wall Street Journal analysis, Warren Buffett's Berkshire Hathaway is predicted to rake in $6 billion in dividends this year.
Most of the stocks in Berkshire Hathaway's portfolio pay dividends, including Chevron, Bank of America, Apple, Coca-Cola, Kraft Heinz, and American Express.