Facebook IPO: Mark Zuckerberg's salary falling to $1 in 2013
With Facebook's S-1 filed with the Securities and Exchange Commission for what is set to be a blockbuster IPO worth at least $5 billion in May, Mark Zuckerberg is now firmly sitting among Silicon Valley's top chief executives, if he wasn't already.
And, probably with that in mind, Zuckerberg is falling in line with a tradition among some of the valley's top CEOs: a $1 annual salary.
Zuckerberg received a $500,000 salary in 2011 and he'll get a $100,000 raise to $600,000 this year, Facebook's S-1 filing said. Zuckerberg also received a $220,500 bonus in the first half of 2011, the filing said.
"In the first quarter of 2012, our compensation committee discussed and approved a request by our CEO to reduce his base salary to $1 per year, effective Jan. 1, 2013," the document said.
Zuckerberg asked for the dramatic salary cut in the first quarter of 2012, according to the S-1, which would mean he made the request sometime in January, given that the document was filed Feb. 1.
The pay cut falls in line with the $1 annual salary taken by Steve Jobs from 1997 until his death last year as Apple's chief executive, and the $1 annual salaries taken by Google's former and current CEOs, Eric Schmidt and Larry Page; Larry Ellison at Oracle; and Meg Whitman at Hewlett-Packard.
But make no mistake, the 27-year-old Zuckerberg is being compensated for his leadership of the world's largest social network in many other ways -- not the least of which is Zuckerberg's 28% stake in Facebook, a company valued at as much as $100 billion.
Facebook, for example, has paid for a home security system and "security personnel" for Zuckerberg, the S-1 said.
"Because of the high visibility of our company we have implemented a 'comprehensive security program' for Mr. Zuckerberg to address safety concerns resulting from his position as our founder, chairman and CEO," the filing said. "We require these security measures for the company's benefit because of the importance of Mr. Zuckerberg to Facebook, and we believe that the costs of this comprehensive security program are appropriate and necessary. We paid for the initial procurement, installation and maintenance of security measures for Mr. Zuckerberg's personal residence, and we pay for the annual costs of security personnel, neither of which constitutes taxable income to Mr. Zuckerberg."
The company also "has also authorized our CEO and COO to use private aircraft for business purposes," the S-1 said. "This practice maximizes such executives' productive time and ensures their quick availability. In addition, Mr. Zuckerberg may use private aircraft for personal purposes in connection with his comprehensive security program. On certain occasions, Mr. Zuckerberg may be accompanied by family members or others when using private aircraft.
"For flights involving passengers flying for personal purposes, the aggregate incremental cost of such personal usage is reported as other compensation to Mr. Zuckerberg. The reported aggregate incremental cost is based on costs provided by the applicable charter company and includes passenger fees, fuel, crew and catering costs. The incremental cost attributable to Mr. Zuckerberg's use of private aircraft in 2011 is disclosed in the 'All Other Compensation' column in '—2011 Summary Compensation Table.'"
Zuckerberg's "Other Compensation" in 2011 totaled $783,529, the filing said, with about $692,679 going "to personal use of aircraft chartered in connection with his comprehensive security program and on which family and friends flew during 2011." The remaining $90,850 was for "costs related to estate and financial planning during 2011," the filing said.
-- Nathan Olivarez-Giles
Photo: Mark Zuckerberg, Facebook's co-founder and chief executive, speaks at the company's F8 developers conference in San Francisco in September 2011. Credit: David Paul Morris / Bloomberg