G. Michael Weiksner Ph.D

Snoop has now completed all the side quests, too

Steve Ballmer’s net worth ($157.2B) just passed Bill Gates ($156.7B) for the first time ever. When Ballmer joined Microsoft in 1980, he was employee #30 and got ZERO equity. By the 1986 IPO, he owned 8% of MSFT and is now its single largest shareholder. How did he get the stake? An interesting contract quirk. Ballmer's Microsoft tale began in 1975, his sophomore year at Harvard (he lived down the hall from Bill Gates). While Gates dropped out to start Microsoft, Ballmer was a total Harvard head: he managed the football team and wrote for The Crimson. After graduating, Ballmer tried his hands at a few different jobs: ◽️Product Manager at P&G, where he worked with future GE CEO Jeff Immelt ◽️A brief attempt at Hollywood screenwriting ◽️Went to Stanford Business School While at Stanford, Ballmer was convinced by Gates to drop out and come join Microsoft. It was 1980 and the software firm was seeing rapid revenue growth. Sales had jumped from $16,000 in 1976 to $8,000,000 in 1980. Ballmer was Gates' first non-technical hire and the offer he gave reflects the fact that Gates' hadn't recruited a business person before. This was the deal for Ballmer: ◽️the title of "business manager" ◽️$50k base salary ◽️NO equity ◽️CRUCIALLY – as Microsoft was so desperate for sales knowledge – Gates (and co-founder Paul Allen) offered Ballmer "10% of profit growth" he could generate With Microsoft growing like a weed (it would 2x to $17m in 1981), Ballmer's "10% of profits" deal was not sustainable. At the time, Microsoft was a partnership (Gates owned 64% while Allen owned 36%). One early VC (Dave Marquardt) wanted to restructure the corporation for wider stock ownership. Gates wanted nothing to do with the restructuring effort, so Ballmer and Marquardt took the lead (Ballmer was especially keen to get actual equity in the company). They drafted the following corporate structure: ◽️Gates and Allen own 84% ◽️8% goes to investors ◽️8% goes to Ballmer (in exchange for waiving his 10% profit share deal) Gates was OK with the deal but Allen was not. Allen wanted Ballmer to own 5% max. So, Gates agreed to drawdown the difference from his own equity stake. By 1986, Ballmer owned 8% of MSFT. It was worth ~$56m when Microsoft IPO'd at a $700m valuation. In the decades since, Ballmer – who was Microsoft's high-energy CEO from 2000-2014 – has largely held onto his MSFT equity. Today, Ballmer owns ~4% of the tech giant while Gates owns ~1%. Ballmer's MSFT position is ~$140B and makes up 90% of his total net worth (making him the 6th richest person in the world). LESSON: Hodl. *** Read More: 1. Forbes: forbes.com/sites/georgeander… 2. The Guardian: theguardian.com/business/200… 3. CNBC: con