new york
CNN
—
For most people, passive income is the little bucks they earn with minimal effort to supplement their primary source of income. For Steve Ballmer, it's $1 billion.
Ballmer, the world's sixth-richest person, is set to receive that amount in dividends from Microsoft in 2024 after the tech giant increased its quarterly dividend to 75 cents a share, or $3 a year.
Former Microsoft CEO Ballmer owned 333.2 million shares of the company as of 2014 (he likely adjusted for his Microsoft stake when he last filed his ownership disclosure), which represents a 4% stake and would mean he would receive just under $1 billion in fiscal 2024. That's the amount he would receive simply for owning the stock, regardless of how the stock price moves.
Ballmer did not respond to a request for comment.
Of course, this assumes that Microsoft's board doesn't decide to drastically cut the dividend, which seems unlikely: The company has been paying dividends to shareholders ever since 2003, when it first did so.
Ballmer won't be the only one to profit: The U.S. government will also get a big cut.
According to ProPublica, Ballmer reported $656 million in income to the IRS in 2018, so it's safe to say he's subject to the 20% dividend tax levied on individuals with annual taxable income of more than $500,000, meaning he'll pay nearly $200 million in taxes on the dividends he receives from Microsoft.
Ballmer isn't the only one to benefit handsomely from holding dividend-paying stocks.
According to a Wall Street Journal analysis, Warren Buffett's Berkshire Hathaway is set to receive $6 billion in dividends this year because most of the stocks it invests in pay dividends, a list that includes Chevron, Bank of America, Apple, Coca-Cola, Kraft Heinz and American Express.
