Steve Ballmer
A Microsoft employee is now richer than Bill Gates
In 2000, Microsoft founder Bill Gates was the richest person in the world – and made Steve Ballmer (right) his successor
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He was Bill Gates’ successor – and is now richer than his predecessor. Steve Ballmer owes this to his loyalty to Microsoft – and to good contract negotiations.
With a fortune of 160 billion dollars, Steve Ballmer is now the sixth richest person in the world. And the only employee in the top ten of the trillionaire index published by the industry service “Bloomberg”. Gates “only” comes in 8th place: he has 159 billion dollars. The only people ahead of Ballmer are now Elon Musk, Amazon founder Jeff Bezos, Berhard Arnault, who owns the luxury group LVHM, Facebook founder Mark Zuckerberg and Google founder Larry Page.
Steve Ballmer is richer than Bill Gates – thanks to Microsoft
There are several reasons why Ballmer is now richer than his predecessor. Firstly, the index only counts assets that those listed own privately – and excludes assets outsourced to foundations. However, Gates has invested a large part of his company in the foundation he has set up with his ex-wife Melinda, which manages 75 billion dollars and invests it in research into vaccines and development aid, for example. Ballmer, on the other hand, has invested much smaller parts of his assets in charitable causes.
But this not only has an effect on the count – it also has a direct impact on Ballmer’s wealth. While Gates has invested in a much more differentiated manner, the vast majority of Ballmer’s wealth is still in Microsoft. And since the hype surrounding OpenAI, the company’s stock has only known one direction: up. Ballmer’s shares in his employer alone are now worth almost 145 billion dollars. They therefore make up almost 90 percent of his wealth.
There is also a dividend that is particularly worthwhile for Ballmer. Microsoft transfers three dollars per share once a year for each share held, and the amount has not changed for years. For the 333.25 million shares that Ballmer last disclosed in 2014, that equates to a transfer of one billion dollars – regardless of how the share price itself develops.
Well negotiated
The fact that Ballmer owns so many shares is due to his employment contract and thus indirectly to Bill Gates. The mountain of shares is gigantic, and not just in numbers: it corresponds to about four percent of the company, making Ballmer the largest individual shareholder in the company – even ahead of the founders Bill Gates and Paul Allen.
In his book “Idea Man,” Allen describes how it came about. According to the book, Gates was keen to hire his former college friend Ballmer. Ballmer had gained management experience at Procter & Gamble, but was now studying at the elite Stanford University. “Steve was someone who didn’t give in easily. That was what you needed to work with Bill,” Allen recalls. “Before a business trip in 1980, I agreed to offer him five percent of the company. Bill believed that he wouldn’t give up Stanford for less.”
When he returned, he learned from a letter circulating in the company that Gates had not kept to the agreement: he had offered Ballmer a significantly larger share of Microsoft, 8.75 percent. Allen drew a harsh conclusion. “I am no longer interested in employing Mr. Ballmer,” he wrote to his co-founder. Gates gave in. “We need Steve,” he told Allen – according to Allen, without being able to look him in the eye. Gates had an offer: he paid Ballmer the remaining shares from his private share. And in doing so made him the richest employee in the world.
Sources:Billionaire Index, Forbes, Washington PostIdeaMan