Facebook Executives Take Pay Cut

By Richard Castellino,
Money & Investing Writer

Facebook (NASDAQ:FB) has paved the way for what has become a new age of social networking. Mark Zuckerberg created the idea at the age of 23, while studying psychol­ogy at Harvard University.

While at the university, Zuckerberg be­came increasingly interested in computer pro­gramming, and eventually came up with what he called, “The Facebook” in 2004. The site started as a way for college students to inter­act socially.

Initial users were primarily college stu­dents, until 2006 when the site was further expanded to the general public. Today Face­book is visited by an estimated 400 million people each month. As a result, Zuckerberg has acquired a substantial amount of wealth, and has recently agreed to take a yearly salary of $1 USD.

Not only has Zuckerberg agreed to take a $1 dollar salary, he will also not be participat­ing in any of the company’s bonus program. Although Zuckerberg is taking a substantial pay cut, he is still well suited financially.

According to Fox News, In 2013, Zuck­erberg earned about $650,000—about a third of the $1.9 million he earned in 2012.

Zuckerberg earned additional revenue in 2012 through sales of the company in stock options. According to the Huffington Post, “Zuckerberg made $2.3 billion when he cashed out 60 million stock options in 2012”. It is apparent that money is not something of need for Zuckerberg.

Zuckerberg’s new $1 salary is something that is not all that uncommon today. Zucker­berg is said by many to now be a part of what is known as, “$1 salary club.:

The “1 dollar salary club” refers to the new trend of CEOs cutting their salaries to $1 after their companies achieve high success. This trend applies to a number of well-known CEOs.

Additional pay cuts have been experi­enced by other Facebook employees on an involuntary level. Facebook Chief Operat­ing Officer, Sheryl Sandberg, has experienced such action.

According to CNN Money, Sandberg earned $10 million less in 2013 compared to her previous earnings in 2012. Additionally, Chief Financial Officer of Facebook, David Ebersman, also experienced a substantial in­voluntary loss.

It is reported that Ebersman earned $10.5 million in 2013. Although seemingly substan­tial, that equates to $7 million less than his $17.5 million earned previously in 2012.

Despite these involuntary salary depress­es, the company has had a prosperous 2013. A report by CNN Money states, “Facebook ad revenue soared 72 percent in 2013, including strong growth in mobile ads, which had been a question mark for the company. Overall sales hit $7.8 billion on the year, up from $5.1 billion in 2012.”

According to Forbes list of global bil­lionaires, Zuckerberg is ranked at number 22, with $25.3 billion in net worth.

Zuckerberg has conformed to a popular trend by joining the elite, “$1 dollar club.”

A version of this article appeared in the Monday, Apr. 7 print edition.

Contact Richard at
richard.castellino@student.shu.edu

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