Microsoft Plan Could Give Shareholders $75 Billion

By Peter Galli  |  Posted 2004-07-20 Print this article Print

The plan includes a switch to a quarterly dividend of 8 cents per share and the buyback of as much as $30 billion in stock over the next four years.

Microsoft Corp. on Tuesday announced a plan to give shareholders as much as $75 billion in value over the next four years. The Redmond, Wash., software company announced a quarterly dividend of 8 cents per share, along with plans to buy back as much as $30 billion of the companys stock over the next four years, and a special one-time dividend of $3 per share. Under the plan, which was approved Tuesday by the Microsoft board, the company will move from its current annual dividend of 16 cents per share to a quarterly dividend of 8 cents per share, which would essentially double the annual dividend to about $3.5 billion, if continued at that level.
The board also approved plans to buy back as much as $30 billion in Microsoft stock over the next four years. The company also will pay a one-time special dividend of $3 per share, or $32 billion, subject to shareholder approval of stock plan amendments that would allow certain adjustments to employee equity compensation awards to offset the impact of this large, one-time payout.
These steps would represent a combined total value to shareholders of as much as $75 billion over the next four years, if quarterly dividends continue at the new level. "We are confident in our long-term ability to grow revenue, profits and shareholder value through our innovation and execution," Microsoft CEO Steve Ballmer said in a statement issued Tuesday afternoon. "We have been successful in addressing a significant portion of our ongoing legal exposure, and all seven of our businesses are growing." Microsoft will continue to make major investments across all of its businesses and maintain its position as a "leading innovator" in the industry, but now also can "provide up to $75 billion in total value to shareholders over the next four years," Ballmer said. "As we looked at our cash-management choices, our priorities were to increase our regular payments to shareholders, increase our stock-buyback efforts given our confidence in the companys growth prospects, and distribute additional resources in the form of a special, one-time dividend," he said. Next Page: Gates says R&D wont suffer.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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