Microsoft Pays First-Ever Dividend

Last week, Microsoft Corp. did something it’s never done before: paid dividends to shareholders. In all, on March 7, the company shelled out $850 million to shareholders, with nearly $100 million going to co-founder and chairman Bill Gates.

After the Redmond, WA-based software giant went public in 1986, the board spent the next 17 years electing to retain net income for contingencies. In January 2003, the company declared a two-for-one stock split and a post-split dividend of $0.08 per share for stockholders on record as of Feb. 21.

By the end of 2002, Microsoft had amassed $43 billion in cash and short-term securities. Having so much cash on hand has been useful to the software developer, allowing the company to make investments and acquisitions as well as legal settlements. However, declining interest rates have lowered the return on cash and in turn, lowered the company’s return on equity.

Some analysts see Microsoft’s decision to issue dividends as a signal that the company has reached a new level of maturity and no longer sees itself as a startup. According to John Connors, Microsoft’s chief financial officer, the board is showing its confidence in the company’s long-term growth opportunities and financial strength.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.
Nov 19How do you minimize redundant work and unnecessary steps to maximize the amount of work moving through your firm?
Nov 20Kristen Rampe will share how to uncover new opportunities with your clients by asking powerful questions.