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Microsoft Sets Dividend

Earnings, IPOs, and the like

from the well,-that-didn't-take-long dept

Thu, Jan 16th 2003 11:20pm — Mike Masnick
Well, well, well. That certainly didn't take long. While other tech companies took their time saying they would (as always) "consider" the dividend question, Microsoft has responded very quickly saying that they will, for the first time ever, give out a (now tax free) dividend. The dividend ($0.16/share) will end up costing them $870.6 million. I wonder if this will cause other tech companies to follow suit. Of course, since Bill Gates owns so much of the company's stock, $100 million of the dividend payout goes directly into his pockets (tax free). Steve Ballmer takes in a lowly $37.68 million. The tax free nature of the dividend means that Gates gets to keep $38.4 million in taxes he would have had to pay, while Ballmer saves himself an extra $14.54 million.
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  • identicon
    Anonymous Coward, 17 Jan 2003 @ 6:06am

    Not tax-free yet

    Let's not jump the gun. Tax-free dividends have not yet been approved by either house of congress.

    [ link to this | view in chronology ]

    • identicon
      Gene Hoffman, 17 Jan 2003 @ 9:53am

      Re: Not tax-free yet

      More importantly, the reform of the Alternative Minimum Tax (AMT) is far from clear. The dividends may be tax free up to $110K and then taxed at an AMT rate of about 33%.

      I find it very interesting that the entire media is missing this issue. I think it may be convenient to show that they don't support the tax break and don't have to get into the details which basically means that all the income is still actually taxed...

      -Gene

      [ link to this | view in chronology ]


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