Open letter to Bill Gates

17 January 2003 By Hugo Dixon Follow @hugodixon

Great that the software giant is finally paying a dividend. Gates has been quick to spot his personal advantage from the Bush tax changes. But to justify the share price, Gates must boost the payout by 40% a year for a decade. Or double it now and then increase it 30% a year.

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To get a copy of our calculator showing how Gates must pump up his dividend, send an email to <a href="mailto:newseditor@breakingviews.com?subject=Please send me the Bill Gates calculator">newseditor@breakingviews.com</a>.

Microsoft announced Thursday that it will pay a dividend to shareholders for the first time. The US software company said it would pay an annual dividend of 16 cents a share, payable on March 7. The move comes in response to shareholder pressure to begin paying dividends. Microsoft also announced a twoforone stock split, set for January 27. The stock split will be Microsoft's ninth to date.

Last week the Bush administration unveiled a plan that would abolish taxation on company dividends.

Microsoft also reported on Thursday a secondquarter net profit of $2.55bn, up from £2.28bn in the year earlier period. The company, which had $43bn in cash and shortterm investments at the end of December, also reported revenue of $8.5bn for the quarter.

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