Usually when we stare at a wall and do nothing, we don’t usually assume that money is filling our pockets. While this is true for most mortals, individuals with (insanely) high net worth have something called ‘passive income’ that generates wealth even when they are not working.
Take former Microsoft CEO Steve Ballmer for example. He is the sixth richest person in the world. A report by CNN calculates that in the year 2024, Ballmer is set to get nearly USD 1 billion for ‘doing nothing’. Now this does need more explanation.
Microsoft has boosted its quarterly dividend payout to 75 cents per share. This means that a person owning 1 share of Microsoft will get 3 dollars per year in dividend.
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Now Ballmer owned no less than 333.2 million shares of the company. At least he did when he last filed ownership disclosure in 2014. These shares mean that Ballmer owns 4 per cent of the tech-behemoth that is Microsoft.
And the dividend for these millions of shares comes to nearly USD 1 billion. In other words, Ballmer would be paid this much just for owning these shares, irrespective of how they perform.
Before we secretly wish we were Steve Ballmer, it is important to note that with this huge income, he would have to pay huge taxes as well.
CNN cited ProPublica to say that in 2018, Ballmer reported USD 656 million in income. He will reportedly have to pay 20 per cent of his dividends in taxes. This would come to about USD 200 million.
The billion-dollar payout on Microsoft share is calculated assuming the company board has not decided to slash dividends on shares. But such a scenario is highly unlikely as Microsoft has been continually increasing the dividends it pays for ownership of the company shares
(With inputs from agencies)
