When Steve Ballmer joined Microsoft, he didn’t get a single piece of the company. But now, his growing Microsoft holdings have made him richer than the company’s founder.
The 68-year-old former Microsoft CEO was claimed by his one-time boss Bill Gates to become the sixth richest person in the world on Monday with a net worth of $157 billion. He is now richer than many well-known tech entrepreneurs, including Google co-founder Sergey Brin, Oracle founder Larry Ellison and Dell Technologies CEO Michael Dell.
It is also the first time that Ballmer’s net worth has surpassed that of Gates, and one of the few times in history that an employee has become richer than the founder of a company. Ballmer is the only person with a net worth of $100 billion or more who made their money as an employee rather than a founder. wealth previously reported.
Ballmer’s net worth was boosted by a surge in Microsoft shares, which closed at an all-time high on Tuesday and are up 22% since January. The company’s shares represent about 90% of his net worth, according to the Bloomberg Billionaires Index, and Microsoft has been one of the biggest beneficiaries of booming AI markets, thanks to its $10 billion investment in OpenAI.
In 2014, Ballmer left Microsoft with about 4% of the stock worth $22.5 billion, according to Forbes. At the time, he said he was holding his shares for the long term, Forbes reported.
“I would like to own Microsoft stock until I give something to charity or die,” he told the newspaper.
Meanwhile, Gates has diversified his portfolio over the years away from the company he founded, with half of his holdings now managed through private investment firm Cascade Investment. He has a $21 billion stake in waste management company Republic Services through Cascade, Bloomberg reported.
Giving money
Gates’ major philanthropic donations also make an impact. As of 2023, Gates and his ex-wife Melinda French Gates had donated $59.5 billion to the Bill & Melinda Gates Foundation, making it one of the largest charitable foundations in the world. In 2010, Gates also created the Giving Pledge with French Gates and investor Warren Buffett, and has pledged to give away most of his wealth during his lifetime.
Although Steve Ballmer’s holdings have made him one of the richest people in the world, when he joined as the company’s 30th employee in 1980, he did not receive any shares. After dropping out of business school at Stanford, he served as Bill Gates’ near-personal assistant with the unimpressive title of “business manager.” Forbes reported.
However, because Microsoft was looking to grow rapidly at the time, Gates and his co-founder, Paul Allen, agreed to give Ballmer 10% of the profit growth he generated on top of his $50,000 annual salary.
This deal proved to be the key to Ballmer’s future fortune. Soon, Microsoft was growing so fast that Ballmer’s 10% cut no longer made financial sense for the company. When Microsoft was reorganized as a corporation, Ballmer negotiated an 8% stake for himself in exchange for waiving his profit-sharing agreement, while Gates and Allen kept 84% and the other 8% was allocated to Microsoft employees. others. Forbes reported. Although Allen was opposed to giving Ballmer such a large stake, Gates stepped in and said Ballmer’s 8% cut could be financed by a withdrawal of his holdings, according to Forbes.
While Gates put his money on the line for Ballmer, the two have since drifted apart.
“Microsoft was kind of the thing that really connected us,” Ballmer told Bloomberg Television in 2016. “We started out as friends, but then we got really involved around Microsoft. Since I’ve been gone, we’ve really drifted apart a little bit.”