Facebook founder and CEO Mark Zuckerberg, along with his three top lieutenants, will get about $2 million in just salaries and bonuses, but cannot work on creating a rival to the social networking giant.
This has been disclosed in Facebook’s amended registration document for its upcoming IPO, filed with the US market regulator Securities and Exchange Commission (SEC) last night.As per Zuckerberg’s employment agreement with Facebook, his job can be terminated “at any time for any reason or no reason”, either by him or by the company.
Besides, the company’s employment agreement does not allow Zuckerberg to “assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company.”
Similar clauses apply to Chief Operating Officer (COO) Sheryl Sandberg, Chief Financial Officer (CFO) David Ebersman and Vice President (Engineering) Mike Schroepfer, for the period these people are rendering their services to Facebook.
The agreements are silent on whether these people, including Zuckerberg, can help create a rival of Facebook after leaving the company.
In addition to in-cash salary and bonus, the pay package of the top four Facebook executives includes millions of dollars in form of stock options, performance pay and other payments.
Besides, the value of shares owned by Zuckerberg and many others at the company could also make them billionaires after the listing of Facebook, which is currently in the process of its USD five billion IPO (Initial Public Offer).
The company said that Zuckerberg, as President and CEO, would get USD 500,000 of base salary and up to 45 per cent of this amount as bonus every year. While the basic wage would be paid in two equal payments a month, he can “over-achieve” the bonus target pursuant to the company’s bonus plan.
Sandberg and Ebersman would get an annual base salary of USD 300,000 each, while the same for Schroepfer would be USD 275,000. All the three executives would be entitled for a bonus payment of up to 45 per cent of their base earnings.
The collective base salary and bonus of the four executives stand at USD 1.99 million (about Rs 10 crore).
In addition to generally common no-conflict obligations, Zuckerberg cannot bring with him to Facebook, or disclose to any person associated with the company, any confidential or proprietary information belonging to any former employer or any other third party.
Noting that his job at Facebook was not any specific period time, the agreement says that the employment would be on an “at will” basis, meaning that either Zuckerberg or Facebook can terminate the employment at any time for any reason or no reason.
While the job duties, title, compensation and benefits, as well as the company’s personnel policies and procedures, might change from time to time, the ‘at will’ nature of Zuckerberg’s employment can be changed only after a written agreement approved by the Facebook board.
The employment agreement of Sheryl Sandberg also carries an ‘at-will’ clause.