Where did Facebook’s profits go last year?
Fortune is pointing out that, according to the company’s initial public offering, 8% went to its top five executives. That’s more than most Wall Street firms, including JP Morgan Chase, which only shelled out $79 million to its top five executives.
That is even more remarkable when you consider that the investment bank has 239,831 employees, compared to Facebook’s 3,200.
Facebook isn’t commenting as it waits out a quiet period ahead of its shares hitting the market. But the scrutiny is something the company should get used to: excessive executive compensation is a surefire way to tick off shareholders and would-be shareholders.
As Fortune senior editor Stephen Gandel points out:
“You can make the case that start-ups have to pay out a higher ratio of their bottom line in pay than a big bank would because they don’t make a lot of money. But Facebook isn’t your typical start-up. It’s bottom line is already $1 billion. What’s more, in the year before Google (GOOG) went public back in 2004, the search firm top executives collectively received just $2.2 million in pay. Of course, those guys were set to get a huge payday from IPO, but so is Zuckerberg and Co.”
The chart above was compile by Fortune shows Facebook’s executive compensation as a percentage of profits when compared with similarly-sized companies.
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