‘Facebook’s Zuckerberg paid record $2.2 billion’
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‘Facebook’s Zuckerberg paid record $2.2 billion’

Last Updated: Wednesday, October 23, 2013, 20:56
 
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‘Facebook’s Zuckerberg paid record $2.2 billion’
San Francisco: Facebook chief Mark Zuckerberg set a new record for corporate compensation in 2012 with a package worth more than USD 2.278 billion, according to a survey by a corporate governance firm.

The report by GMI Ratings showed Zuckerberg`s salary of USD 503,000 and bonus of USD 266,000 were eclipsed by stock options worth some USD 2.27 billion.

This was the first year the survey found any chief executive collected more than USD 1 billion, according to the GMI report released Tuesday.

One other CEO`s compensation also topped USD 1 billion in 2012, energy giant Kinder Morgan`s Richard Kinder, paid a salary of USD 1 and given stock worth more than USD 1.1 billion.

Those two overshadowed other CEOs, with the third-highest paid being Sirius XM Radio`s Mel Karmazin at USD 255 million, followed by Liberty Media`s Gregory Maffei (USD 254 million) and Apple`s Tim Cook (USD 143 million).

Maffei also collected USD 136 million for his role of CEO at Liberty Interactive Corp, the seventh highest on the list. Putting those two together would make him the third highest-paid with USD 390 million.

In the survey of 2,259 North American publicly traded companies, GMI said pay increased a median of 8.47 percent. For the companies in the Standard and Poor`s 500 index, compensation rose 19.65 percent at the median.

"In the more than ten years that GMI has been publishing this report, I`ve never seen a top ten highest paid list that loomed this large," said Greg Ruel, author of the report.

"While the companies in this year`s list have performed well over the past three and five year periods in terms of shareholder return, generally speaking, it`s the sheer size and volume of equity awards granted to these top executives that catapults their total compensation to astronomical levels."

The massive compensation packages are generally due to stock awards, often in the form of options which allow a CEO to buy shares at a fixed price and cash in on gains.

GMI said Zuckerberg exercised 60 million stock options, granted in 2005 and fully vested by 2010, at a strike price of just six cents.

When Facebook went public in May 2012, Zuckerberg`s worth vaulted by more than USD 2.7 billion dollars on the difference.

"Lest anyone think these are merely paper profits, readers may recall that Mr. Zuckerberg immediately liquidated more than USD 1 billion worth of shares at the company`s IPO," the GMI report said.

"The second largest form of compensation for Mr. Zuckerberg was perquisites totaling about USD 1.2 million, including personal use of company aircraft during 2012 for him and guests as well as security costs."

GMI noted that while stock options are intended to align the interests of top executives with shareholders, "the unintended consequence of these grants is often windfall profits that come from small share price increases."

The others in the top 10 list were Dick`s Sporting Goods`s CEO Edward Stack, paid USD 142 million, Starbucks` Howard Schultz (USD 117 million), Salesforce`s Marc Benioff (USD 109 million) and Verisk Analytics` Frank Coyne (USD 100 million).


AFP

First Published: Wednesday, October 23, 2013, 20:56


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