Microsoft Plan Could Give Shareholders $75 Billion

Microsoft Plan Could Give Shareholders $75 Billion
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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.

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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.

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