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.
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