By Dina Bass - Feb 2, 2012 8:50 AM GMT+0700
Facebook Inc. Chief Operating Officer Sheryl Sandberg received $30.9 million in total compensation in 2011, making her the best-paid senior executive at the world’s largest social network.
Sandberg’s compensation includes base salary, bonus and $30.5 million in stock awards, Menlo Park, California-based Facebook said today in the filing for its initial public offering.
While Sandberg’s compensation was the highest, her 0.1 percent stake is dwarfed by the 28.4 percent owned by Chief Executive Officer Mark Zuckerberg, which may vault him into the top 10 on Forbes list of the world’s wealthiest people. The CEO received $1.49 million in compensation for 2011, including a base salary of $483,333. That will drop to $1 in 2013.
“It has always been fairly typically in the tech model of executive compensation to lever heavily on the future success of the company by granting compensation based on future stock awards,” rather than large salaries, said Frank Glassner, chief executive officer of Veritas Executive Compensation Consultants in San Francisco. “In the case of Facebook they certainly stand to gain a tremendous amount of value.”
Facebook, founded in 2004 in a Harvard University dorm, filed today to raise $5 billion in what would be the largest Internet IPO on record. The company has discussed seeking a valuation of as high as $100 billion, two people with knowledge of the matter said last week.
Private Jet
At the high end of that range, Zuckerberg’s stake would be worth $28.4 billion, ahead of all but eight people in Forbes annual list last year.
Zuckerberg’s compensation for last year included $692,679 in costs associated with use of a private jet. He also received $90,850 in estate and financial planning last year.
The move to a $1 salary is a “symbolic gesture,” and matches the salaries paid to such executives as Apple Inc. co- founder Steve Jobs, Glassner said. The practice was popularized by Lee Iacocca, who requested that salary when he took over Chrysler Corp. and saved it from bankruptcy, Glassner said. The low salary often belies the fact that the executive makes huge profits on stock.
Sandberg received $381,966 in salary and bonus last year. Chief Financial Officer David Ebersman received $18.7 million in compensation last year, mostly consisting of $18.3 million in stock awards.
Security Detail
Facebook, which had 845 million users at the end of last year, didn’t specify the price or number of shares it will sell in the filing. The $5 billion is a placeholder used to calculate fees and may change.
Zuckerberg receives special security protection paid for by Facebook, according to the filing. This includes a security system at his house in Palo Alto, California, and the annual cost of security personnel.
“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,” according to the filing.
Facebook also will pay for Zuckerberg to use a private plane for business and personal uses, according to the filing. Sandberg also is authorized to use a private plane for business purposes.
To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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