How Zuck wields power over Facebook for a few hundred bucks
CEO's voting rights and package exposed
Mark Zuckerberg's effortless swagger into the business world got an airing in public yesterday when Facebook filed more documents to the US Securities and Exchange Commission ahead of the company going public in a few months' time.
Just days before the dominant social network submitted its regulatory filing confirming its plan to take the company public, Zuckerberg's letter of employment with Facebook was amended.
It confirmed that the CEO of the world's largest social networking site would have an annual base salary of $500,000. On top of that, if Zuck satisfies shareholders and the board, he can expect to receive "a semi-annual discretionary bonus of up to a target of 45 per cent". He is also barred from working on or helping anyone else make a rival social network to Facebook while at the company.
In January 2013, Zuckerberg's annual base salary will be reduced to $1.
At the same time, Facebook COO Sheryl Sandberg, chief bean counter David Ebersman, engineering veep Mike Schroepfer and general counsel Theodore Ullyot all had their employment letters amended and restated.
Sandberg and Ebersman each get a base salary of $300,000, while Schroepfer and Ullyot get $275,000 a pop.
Various other nuggets among the regulatory documents filed with the SEC yesterday included an explanation of exactly how the already-floated gaming outfit Zynga is deeply hooked into Facebook.
A Developer Ammendum dated 14 May 2010 discloses the following:
The parties acknowledge that FB desires to enable Zynga to build the Zynga Platform on top of the Facebook Platform, and the parties desire to, amongst other goals set forth herein, work together to increase the number of users of each party’s products and services.
The parties further acknowledge that Zynga is making a significant commitment to the Facebook Platform (ie, using Facebook as the exclusive Social Platform on the Zynga Properties and granting FB certain title exclusivities to Zynga games on the Facebook Platform). In exchange for such commitment, the parties have committed to set certain growth targets for monthly unique users of Covered Zynga Games.
The original S-1 filing to the commission revealed that Facebook derived 12 per cent of its total revenue from Zynga in 2011.
Facebook also disclosed that Zuckerberg paid a paltry $100 in cash to stockholders to cede their voting rights in the company, leaving him in control of the biz. He owns a massive 57 per cent share in those rights while owning 28.4 per cent of the company.
This means the CEO shrewdly bought the voting rights from the likes of venture capital outfit Accel Partners, Bono's Elevation Partners, serial Web2.0 investor Digital Sky Technologies and erswhile Facebook President Sean Parker, who was played by Justin Timberlake in The Social Network movie that dramatised Facebook's messy youth.
Shortchanged? Perhaps. But then, that's how you grow a biz empire... bitch. ®