Ballmer's net worth soars on retirement announcement

PUBLISHED : Sunday, 25 August, 2013, 12:00am
UPDATED : Sunday, 25 August, 2013, 6:49am

Microsoft CEO Steve Ballmer, the world's 44th-richest person, saw his net worth jump US$786 million after announcing his retirement from the world's largest software maker.

Ballmer, 57, is the second-largest individual shareholder of Microsoft, after co-founder and chairman Bill Gates, the world's richest man. Ballmer has a net worth of US$16.8 billion, according to the Bloomberg Billionaires Index. He said he planned to step down within the next 12 months after serving as CEO since 2000.

Microsoft shares leapt as much as 9 per cent in pre-market trading on Friday in New York and closed up 7.3 per cent at US$34.76, after the surprise announcement sparked a rally in the stock.

Almost 70 per cent of Ballmer's fortune is derived from Microsoft shares.

The stock has gained 30.1 per cent during the year, driving up Gates' fortune by 15.4 per cent and Ballmer's by 21.5 per cent.

Gates, 57, co-founded Microsoft with billionaire Paul Allen in 1975, and is still its largest individual shareholder with a 4.8 per cent stake. Ballmer, who joined Microsoft in 1980, holds 4 per cent. Allen, 60, who controlled as much as 28 per cent of Microsoft shares, now holds 2 per cent, according to the index.

When Ballmer became CEO, Microsoft had a market value of US$604 billion. It accounted for nearly 5 per cent of the Standard & Poor's 500 index.

Now, Microsoft's market value is US$269 billion, less than half of its value when Ballmer came to power. It makes up less than 2 per cent of the S&P 500. The shares have not closed above US$50 since his first year on the job.

Under Ballmer, Microsoft's stock has lost 44 per cent during his tenure. An investment of US$1,000 in January 2000 would now be worth just US$767 after reinvesting dividends, according to data from FactSet. The same investment in Apple would be worth US$20,120.

Additional reporting by Associated Press