This may be a reason for the claim, that "Bill Gates" was paid per line of code:
Ars Technica wrote
OS/2 was plagued by delays and bureaucratic infighting. IBM rules about confidentiality meant that some Microsoft employees were unable to talk to other Microsoft employees without a legal translator between them. IBM also insisted that Microsoft would get paid by the company's standard contractor rates, which were calculated by “kLOCs," or a thousand lines of code.
There's a similar story in Wikipedia's SLOC article,
In the PBS documentary Triumph of the Nerds, Microsoft executive Steve Ballmer criticized the use of counting lines of code:
In IBM there's a religion in software that says you have to count K-LOCs, and a K-LOC is a thousand lines of code. How big a project is it? Oh, it's sort of a 10K-LOC project. This is a 20K-LOCer. And this is 50K-LOCs. And IBM wanted to sort of make it the religion about how we got paid. How much money we made off OS/2, how much they did. How many K-LOCs did you do? And we kept trying to convince them - hey, if we have - a developer's got a good idea and he can get something done in 4K-LOCs instead of 20K-LOCs, should we make less money? Because he's made something smaller and faster, less K-LOC. K-LOCs, K-LOCs, that's the methodology. Ugh! Anyway, that always makes my back just crinkle up at the thought of the whole thing.
Apparently this was a reason why they broke up:
The two companies had significant differences in culture and vision. Microsoft favored the open hardware system approach that contributed to its success on the PC; IBM sought to use OS/2 to drive sales of its own hardware, including systems that could not support the features Microsoft wanted. Microsoft programmers also became frustrated with IBM's bureaucracy and its use of lines of code to measure programmer productivity. IBM developers complained about the terseness and lack of comments in Microsoft's code, while Microsoft developers complained that IBM's code was bloated.