Twitter CEO’s low 2013 salary surprises

The CFO was the highest-paid executive by a wide margin last year

If Twitter Chief Executive Officer Dick Costolo’s salary of $130,250 for the year 2013 sounds ridiculously low, that’s because it is. Costolo reported a 2012 compensation of $11.5 million including base salary, stock awards, and options. His 2013 compensation included nothing but salary, in the company’s filing with the Securities and Exchange Commission on April 9.

Bloomberg reports that this is not unusual for CEOs of high-profile, lucrative technology companies, although Twitter’s lucrativeness is still under close watch by investors in its post-IPO months. Costolo’s salary has been reduced, but he still owns 8.18 million shares of Twitter, which accounts for about a 1.4 percent stake in the company. The social network’s IPO went live in November 2013, and since then, its share price has increased by 63 percent. The Wall Street Journal notes that, as of the stock’s closing price on April 9, that amount of shares is worth $347.6 million.

Although it would seem worrisome to investors that the CEO’s salary has dipped so much, Costolo’s compensation is not the best barometer for how the company is doing. The CFO, Mike Gupta, who ushered the company through last year’s IPO made $24.6 million including stock awards. The stock accounts for $24.4 million, and his base salary was $250,000. Gupta went to Twitter from Zynga — a move that clearly was the right choice as Zynga’s stock price was hurting at the time, and several executives were going elsewhere. Vijaya Gadde — Twitter’s general counsel — was compensated $15.1 million, making her the second-highest paid executive.

The company has yet to report any earnings, but is scheduled to do so on April 29 when it holds its first earnings call.

Costolo could just be following in the footsteps of his Silicon Valley peers; Mark Zuckerberg of Facebook lowered his salary to $1, and executives at Google and Apple have made similar moves — particularly as they became wealthier.

 

Further reading:

When employees leave, Twitter followers up for grabs

Will Twitter demand government transparency in court?

Intel CEO’s salary takes a hit

Contributing Author

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Juliana Kenny

Juliana Kenny is a contributor to InsideCounsel.com, covering a range of topics including patent litigation, conflict mineral laws, executive compensation, and antitrust regulation. Juliana earned B.A.s...

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