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Microsoft Considers $10 Billion Dividend

Posted by ryuzaki0 on from the money-money dept.

Dreadnougat writes "Microsoft is considering paying out a $10 billion dividend, the largest corporate payout ever. Cynics (ok, anyone reading /.) might note that Bill Gates stands to make $1.18 billion himself off the $1 a share dividend, in comparison to the $95 million he makes in a normal year off the regular 8 cents a share dividend."

2 of 630 comments (clear)

  1. Interesting development by Pettifogger · · Score: 5, Interesting
    Hmmm... anyone wonder why Microsoft is really doing this? No, it's not Gates' greed; he has enough and he knows it. This is a plan to ensure the long-term stability of the company. Linux is starting to get more press and is being increasing seen as a viable alternative. I think this is a strategy to increase investor confidence and tie the company's financial rewards more to the public. Everyone knows what the profit margin is on their products and that the corporation itself keeps almost all of that. I think this is a subtle way of saying that they're going to start sharing their big income.

    And consider this: a lot of companies, institutions, foundations, trusts, etc. regularly buy securities for endowments and other investment purposes. Now, if Microsoft stock is a good performer, it would give Microsoft an "in" with those companies and institutions for software sales.

    No matter what you think of Microsoft (and for the record, I do not have a single Microsoft product under my roof) this is a smart business move. And I might add that Linux cannot compete on these grounds, either. Smart move... seriously.

    --

    IAAL

  2. Need to Pump Up Stock Price by virtigex · · Score: 5, Interesting
    The biggest problem that Microsoft has to deal with is their langusihing stock price. When the stock stalled in in 2000 many people left, because there was no more money to be made from the stock options.

    Microsoft is made up of a load of long-timers who have made enough money through stock options that they don't really have to work and the newcomers whose stock options have been underwater for several years.

    Without stock options (and the money generated with a rising stock price) neither the money or the work environment is much to write home about. Neither the old-timers or newcomers are particularly motivated and most of the "innovation" goes on by buying smaller companies.

    Issuing a dividend is one way to pump the stock price up and thus motivate some employees.