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Tech CEOs add billions to their wealth in 1999

For 14 chief executives at high-tech companies, the surging stock market adds at least $1 billion to their personal fortunes.

What a difference a year makes.

Technology stocks had a spectacular year in 1999, propelling the Dow Jones industrial average and Nasdaq composite index to record highs.

For 14 chief executives at high-tech companies, the surging stock market added at least $1 billion to their personal fortunes. The list is topped by the world's richest man, Bill Gates of Microsoft, whose stake in the software giant surged $38.2 billion for the year to $92.8 billion.

Michael Birck, CEO of phone networks equipment maker Tellabs, didn't fare too badly: The value of his holdings increased $1.2 billion to $2.6 billion.

CNET derived the list based on the number of shares held and options that were exercisable within 60 days of the filing of the companies' latest proxies. The values of the individual stocks are based on Wednesday's closing figures.

Larry Ellison, CEO of database maker Oracle, also managed to increase his wealth by $26.9 billion to $36.4 billion.

Qualcomm CEO Irwin Jacobs saw his paper wealth jump by $1.7 billion during the year, as the wireless technology company became the best performing stock of the S&P 500 index, gaining more than 2,300 percent.

A string of announcements has fueled Qualcomm stock in recent weeks, including its 4-for-1 split today, strong quarterly earnings and a recent $1,000 price target that was set by a PaineWebber analyst.

"The wealth accumulated in the past five years is phenomenal," said Richard Cripps, chief equity strategist for Legg Mason.

He noted that the Wilshire index--the most comprehensive measure of wealth because it includes all U.S. stocks traded--had a value of $15.4 trillion at the end of this year.

That figure is 50 percent larger than the output of the U.S. economy, which stands at about $10 trillion. Five years ago, the Wilshire index was half the size of the economy.

Billion-dollar bonanza
Based on the shares they currently own and the stock options that they could exercise within 60 days of the filing of the companies' latest proxies, the holdings of 14 technology CEOs gained at least $1 billion in value in 1999.
Name Company Holdings value 12/29/99 (billions) Billions made in 1999
1. Bill Gates Microsoft $92.8 $38.2
2. Larry Ellison Oracle 36.4 26.9
3. Charles W. Ergen EchoStar Communications 10.5 9.0
4. Theodore W. Waitt Gateway 8.9 5.6
5. Michael S. Dell Dell Computer 18.3 5.4
6. Henry T. Nicholas Broadcom 5.4 4.2
7. David S. Wetherell CMGI 4.5 4.1
8. Jeffrey Bezos 9.8 3.5
9. Robert Glaser RealNetworks 3.6 3.1
10. Kevin O'Connor DoubleClick 2.3 2.1
11. Thomas M. Siebel Siebel Systems 2.5 2.0
12. Irwin Mark Jacobs Qualcomm 1.8 1.7
13. Barry Diller USA Networks 3.5 1.4
14. Michael J. Birck Tellabs 2.6 1.2
Source: Companies' latest proxy statements

The sudden surge in paper wealth has left the Federal Reserve with the challenge of sizing up shifts in the economy. It's hard to say how much of this newfound paper wealth will be converted into cash and spent on items such as boats, planes and new homes.

"It's driving economic growth higher than it otherwise would be," Cripps said. "People are feeling wealthier and going out and buying things. The downside is it creates a mentality that saves less money. Personal expenditures verses income is at a negative in this country, implying people aren't saving."

Evidence of the newfound wealth is everywhere.

During the year, $74.4 billion was raised in initial public offerings, up 70 percent from the previous year, according to the Securities Industry Association. And more Americans are sharing in the wealth: Almost half of U.S. households own stocks, compared with 19 percent of households in 1983.

There are numerous examples of companies that have created instant millionaires.

Business-to-business software maker Commerce One, for example, launched the top-performing IPO for 1999, as the shares have soared more than 2,700 percent from the July offering price of $21. The company got a boost again when its 3-for-1 split took effect earlier this week.

Although the company's CEO, Mark Hoffman, is not part of the billion-dollar gainers club, he's seen his personal wealth skyrocket in the past six months. Based on the 1.8 million split-adjusted shares he holds, his paper worth is $372.4 million as of yesterday's close.