July 5, 2024, 1:55 pm | Read time: 4 minutes

The two former Microsoft giants, Bill Gates and Steve Ballmer, have been neck and neck in terms of wealth for years. Now, Ballmer has managed to surpass his former boss and take the lead. With about $157.2 billion, Ballmer has climbed to sixth place on the Bloomberg Billionaires Index (as of July 4, 2024). The former richest person in the world, meanwhile, is in eighth place and even has Larry Ellison ahead of him. Among the 20 richest people on the Bloomberg Index, there are as many women as there are Larrys: two each. According to Bloomberg, the richest woman is the French industrialist Francoise Bettencourt Meyers in 18th place.

But back to Ballmer: Not only is it unusual that an employee is richer than his former boss, but unlike most other top billionaires, his wealth does not come from an inheritance or shares in a company he founded himself. The extroverted manager simply made some very smart decisions at the right times.

The Assistant Who Surpassed His Boss

Steven Anthony Ballmer was born in Detroit, Michigan, in 1956. He graduated from Harvard University in 1977 with a bachelor’s degree in applied mathematics and economics and joined Microsoft in 1980. He was not only the thirtieth employee of the then five-year-old company but also made a meteoric career as Bill Gates’ assistant and business manager. Ballmer became particularly well-known for his energetic, sometimes sweat-inducing stage performances, which not only got the audience cheering but also earned him the nickname Monkeyboy.

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In 2000, when Bill Gates stepped down as CEO of Microsoft, Ballmer succeeded him. He considers Windows Vista the biggest mistake of his career, as it failed to become the next big thing despite years of development. In 2014, Ballmer handed over his position to the current Microsoft CEO, Satya Nadella. In the same year, as if to celebrate his retirement, Ballmer bought the Los Angeles Clippers basketball team for $2 billion. Today, Forbes estimates the team’s value at $4.65 billion.

Apparently, Ballmer made some right moves during his salary negotiations. Initially, he negotiated a base salary of 47,000 euros and an additional 10 percent of the profit growth he generated. When that profit became too large, the agreement was adjusted to include equity participation. In 1981, Microsoft became a corporation, and Ballmer owned 8 percent of the capital. Just over ten years later, in 1993, his stake was worth over $1 billion.

How Did Ballmer Surpass Bill Gates?

This investment strategy not only made Ballmer wealthy. The AI hype of recent years gave Microsoft shares an additional boost–but shouldn’t it have been the same for Bill Gates? Although the Microsoft founder also owns shares in his company, his wealth is more diversified than Ballmer’s. The latter not only owns the most Microsoft shares, but they also make up a large part of his total wealth. Microsoft’s growth benefits Ballmer more.

At the same time, Gates has spent a lot of money over the past 25 years, especially on the Bill and Melinda Gates Foundation, founded in 2000. One-third of their joint private wealth, more than $36 billion, has flowed into the foundation between 1994 and 2018. According to their own statements, the foundation’s goal is not to accumulate profits in the long term but to use the money for charitable purposes 20 years after the deaths of Bill and Melinda Gates.

Steve Ballmer has not yet used his wealth for philanthropic purposes to the same extent. He has donated to various U.S. universities, including establishing a $425 million fund for the University of Oregon. In 2017, he founded the nonprofit organization USAFacts.org, which explains and contextualizes data and numbers with the slogan “Our nation, in numbers.”

Ballmer currently being financially ahead of Gates is due to the stock situation and their different investments. Moreover, Bloomberg’s index is ultimately based on current estimates, not the self-reports of the billionaires. Therefore, it wouldn’t be surprising if the race between Gates and Ballmer for the better position soon enters a new round.