July 5, 2024, 3:55 p.m. | Reading time: 4 minutes
Who remembers Steve Ballmer, the Microsoft manager and CEO, who ecstatically jumps around the stage in a shirt and a bald head? According to Bloomberg, Ballmer has surpassed his former boss Bill Gates in terms of wealth for the first time. TECHBOOK knows the background.
The two former Microsoft giants Bill Gates and Steve Ballmer have been neck and neck in terms of wealth for years. Now Ballmer has managed to get ahead of his former boss. With around 157.2 billion US dollars, Ballmer has climbed to 6th place in the Bloomberg Billionaires Index (as of July 4, 2024). The former richest person in the world, on the other hand, is in 8th place and even has Larry Ellison ahead of him. Incidentally, there are just as many women as Larrys among the 20 richest people in the Bloomberg Index: two each. According to Bloomberg, the richest woman is the French industrialist Francoise Bettencourt Meyers in 18th place.
But back to Ballmer: It is not just the fact that he is an employee richer than his former boss that is unusual. Unlike most other top billionaires, his wealth comes neither from an inheritance nor from shares in a company he founded himself. The extroverted manager has simply made some very smart decisions in the right places.
The assistant who outdoes his boss
Steven Anthony Ballmer was born in Detroit, Michigan, in 1956. He graduated from Harvard University with a bachelor’s degree in applied mathematics and economics in 1977 and joined Microsoft in 1980. He was not only the thirtieth employee of the then five-year-old company, but also had a meteoric career as an assistant to Bill Gates and business manager. Ballmer was particularly well-known for his energetic, sometimes sweaty stage performances, which not only made the audience cheer, but also earned him the nickname Monkeyboy.
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In 2000, when Bill Gates retired from his position as CEO of Microsoft, Ballmer succeeded him. He considers Windows Vista to be the biggest mistake of his career, as it did not have what it takes to be the next big thing despite years of development. In 2014, Ballmer handed over his position to the current Microsoft CEO Satya Nadella. In the same year, as if to celebrate the start of his retirement, Ballmer bought the Los Angeles Clippers basketball club for two billion US dollars. Today, Forbes estimates the club’s value at 4.65 billion dollars.
Apparently Ballmer had already done a few things right in his salary negotiations. Originally he negotiated a base salary of 47,000 euros plus an additional 10 percent of the profit growth he generated. When that profit became too large, the agreement was adjusted to include a capital share. In 1981, Microsoft became a public company and Ballmer owned 8 percent of the capital. A good ten years later – in 1993 – his share was worth over a billion US dollars.
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How did Ballmer overtake Bill Gates?
This investment strategy has not only made Ballmer rich. The AI hype of recent years has given Microsoft shares an additional boost – but shouldn’t Bill Gates have felt the same way? Although the Microsoft founder also owns shares in his company, his wealth is broader overall than that of Ballmer. The latter not only owns the most Microsoft shares, they also make up a large part of his total wealth. Microsoft’s growth therefore benefits Ballmer more.
At the same time, Gates has spent a lot of money over the past 25 years, especially on the Bill and Melinda Gates Foundation, which was founded in 2000. A third of their combined private fortune, or more than $36 billion, went to the foundation between 1994 and 2018. According to the foundation’s own statements, the goal is not to accumulate long-term profits, but to use the money for charitable purposes 20 years after the death of Bill and Melinda Gates.
Steve Ballmer has not yet used his wealth for philanthropic purposes to this extent. He has donated to various US universities, including setting up a $425 million fund for the University of Oregon. In 2017, he founded the non-profit organization USAFacts.org, which explains and classifies data and figures with the slogan “Our nation, in numbers.”
The fact that Ballmer is currently ahead of Gates financially is due on the one hand to the stock market situation and on the other to the different investments made by the two. In addition, Bloomberg’s index is ultimately based on current estimates, not on the billionaires’ own statements. In this respect, it would not be surprising if the race between Gates and Ballmer for the better position soon entered a new round.
2024-07-05 14:13:01
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