Gates to make $100m per year from tax free Microsoft dividends

Thank you, Dubya...

By David Becker Microsoft chairman Bill Gates will rake in almost $100m per year in potentially tax-free income from the company's newly instated stock dividend programme. Microsoft announced on Thursday it plans to issue its first ever annual dividend to shareholders on 7 March. The payout will be 16 cents for each share on record as of 21 February. Based on Microsoft's latest proxy statement, filed on 19 September 2002 with the US Securities and Exchange Commission, Gates has about 621 million shares, or 11.6 per cent of the company. That would give him a dividend bonanza of $99.48m. CEO Steve Ballmer, with some 235 million shares, would get $37.68m per year. President Bush recently revealed details of an economic stimulus plan that includes a proposal to eliminate personal taxes on stock dividends. If passed by Congress, the provision would save Gates some $38.4m in taxes, based on the current top income tax rate of 38.6 per cent. Ballmer would save $14.54m. The total payout will be $870.6m, a fraction of Microsoft's $40.5bn cash reserves. David Becker writes for CNET News.com.