Facebook approves $10 million security budget to protect Mark Zuckerberg, $27,000 per day

Mark Zuckerberg running in Delhi, IndiaFacebook

• Facebook approved a $10 million pre-tax allowance for CEO Mark Zuckerberg’s security. 
• He can spend the funds on security personnel, residential improvements, and private aircraft for personal travel.
• Zuckerberg draws a $1 salary and is worth $67.1 billion primarily due to his stake in Facebook.  

Protecting Mark Zuckerberg isn’t cheap. 

Facebook recently approved $10 million in annual security costs for its CEO Mark Zuckerberg and his family. The social networking giant announced the increase in the pre-tax allowance security in an SEC filing on Thursday. 

Zuckerberg will spend the money on bodyguards, security measures for Zuckerberg’s houses, and private aircraft, according to the filing.  

From the filing:

“On July 24, 2018, the Committee approved an annual pre-tax allowance of $10 million to Mr. Zuckerberg to cover additional costs related to his and his family’s personal security. This allowance will be in addition to the continued funding of Mr. Zuckerberg’s overall security program to cover the costs of security personnel for his protection; the procurement, installation, and maintenance of certain required security measures for his residences; and the usage of private aircraft for personal travel. This allowance will be paid to Mr. Zuckerberg net of required tax withholdings, and Mr. Zuckerberg may apply the net proceeds to pay for additional personnel, equipment, services, residential improvements, or other security-related costs.”

Facebook said that the cost was justified and for the company’s benefit because “of the importance of Mr. Zuckerberg to Facebook.”

Facebook has had a difficult, high-profile year. In April, Zuckerberg testified before Congress, and Facebook’s role in the distribution of misinformation and political news has caused bursts of anger around the world. 

In 2017, Zuckerberg visited every single state as a personal mission, one factor that led to a nearly 50% bump in security costs in that year to $7,326,640. Facebook spent $4,891,441 in 2016 and $4,256,004 in 2015 to protect its CEO. 

Now the cost to protect Zuckerberg is rising even higher. In April, CNBC reported that Equilar, an executive compensation research firm, said that Zuckerberg’s previous security costs were the largest amount it’s seen “by a large margin” among big firms over the past five years. 

Zuckerberg’s base salary will be $1 in 2018, but the vast majority of his wealth is tied to his existing stake in Facebook. He’s currently worth $67.1 billion, according to Forbes, even after Facebook shares dropped 19% earlier this week.

Here’s the complete text from the filing: 

As previously disclosed, the Compensation & Governance Committee (the Committee) of our Board of Directors has authorized an overall security program for Mark Zuckerberg to address safety concerns due to specific threats to his safety arising directly as a result of his position as Facebook’s founder, Chairman, and CEO. We require security measures for the company’s benefit because of the importance of Mr. Zuckerberg to Facebook. The Committee regularly reviews Mr. Zuckerberg’s security program and the related costs, which vary from year to year depending on requisite security measures, Mr. Zuckerberg’s travel schedule, and other factors.

On July 24, 2018, the Committee approved an annual pre-tax allowance of $10 million to Mr. Zuckerberg to cover additional costs related to his and his family’s personal security. This allowance will be in addition to the continued funding of Mr. Zuckerberg’s overall security program to cover the costs of security personnel for his protection; the procurement, installation, and maintenance of certain required security measures for his residences; and the usage of private aircraft for personal travel. This allowance will be paid to Mr. Zuckerberg net of required tax withholdings, and Mr. Zuckerberg may apply the net proceeds to pay for additional personnel, equipment, services, residential improvements, or other security-related costs.

In approving this annual security allowance, the Committee considered Mr. Zuckerberg’s position and importance to Facebook and the fact that Mr. Zuckerberg has requested to receive only $1 in annual salary and does not receive any bonus payments or equity awards. The Committee also considered comparative data from the peer group of companies that Facebook benchmarks against for executive compensation purposes, as well as other relevant information regarding executive compensation and perquisites. The Committee believes that this allowance, together with the costs of Mr. Zuckerberg’s existing overall security program, are appropriate and necessary under the circumstances.