When Steve Ballmer joined Microsoft, he didn’t get a single share of the company. But now his sky-high Microsoft stock has made him richer than the company’s founder.
The 68-year-old former Microsoft CEO on Monday eclipsed his former boss Bill Gates to become the sixth-richest person in the world with a net worth of $157 billion. He is now wealthier than many notable tech entrepreneurs, including Google co-founder Sergey Brin, Oracle founder Larry Ellison and Dell Technologies CEO Michael Dell.
It is also the first time that Ballmer’s net worth has surpassed Gates’, and one of the few times in history that an employee has become richer than a company’s founder. Ballmer is the only person with a net worth of $100 billion or more who made his money as an employee rather than a founder, since Fortune Previously reported.
Ballmer’s net worth has been boosted by a rally in Microsoft’s stock, which closed at a record high on Tuesday and has risen 22% since January. The company’s shares account for about 90% of his net worth, according to the Bloomberg Billionaires Index, and Microsoft has been one of the biggest beneficiaries of the AI boom that’s fueling markets, thanks to its $10 billion investment in OpenAI.
In 2014, Ballmer left Microsoft with a stake of about 4% worth $22.5 billion, according to ForbesAt the time he said he was holding his shares for the long term, Forbes reported.
“I would like to continue to own Microsoft stock until I give something to charity or until I die,” he told the outlet.
Meanwhile, Gates has diversified his portfolio over the years away from the company he founded, with half of his assets now managed by private equity firm Cascade Investment. He has a $21 billion stake in waste management company Republic Services through Cascade, Bloomberg reported.
Giving away money
Gates’ large philanthropic giving also plays a role. As of 2023, Gates and his ex-wife Melinda French Gates had donated $59.5 billion to the Bill & Melinda Gates Foundation, making it one of the world’s largest charities. In 2010, Gates also created the Giving Pledge with French Gates and investor Warren Buffett, pledging to give away the majority of his wealth during his lifetime.
Although Steve Ballmer’s wealth has made him one of the richest men in the world, he did not receive any stock when he joined the company in 1980 as its 30th employee. After dropping out of Stanford Business School, he worked as a quasi-personal assistant to Bill Gates with the unimpressive title of “business manager”, Forbes reported.
Because Microsoft wanted to grow quickly at the time, Gates and his co-founder Paul Allen agreed to give Ballmer 10% of the profit growth he generated, on top of his $50,000 annual salary.
That deal proved to be the key to Ballmer’s future wealth. Soon, Microsoft was growing so fast that Ballmer’s 10% cut no longer made financial sense for the company. When Microsoft reorganized as a corporation, Ballmer negotiated an 8% cut for himself in exchange for giving up his profit-sharing deal, while Gates and Allen kept 84% and another 8% was earmarked for other employees, Forbes reported. Although Allen was against giving Ballmer such a large stake, Gates stepped in and said Ballmer’s 8% cut could be financed by a withdrawal of his own shares, according to Forbes.
Although Gates once risked his own money for Ballmer, the two have since grown apart.
“Microsoft was actually the thing that really bonded us,” Ballmer told Bloomberg Television in 2016. “We started out as friends, but then we got really wrapped up in Microsoft. Since I’ve been gone, we’ve really drifted apart a little bit.”
This story originally appeared on Fortune.com
