Facebook chief Mark Zuckerberg set a new record for corporate compensation in 2012 with a package worth more than $2.278 billion, according to a survey by a corporate governance firm.
The report by GMI Ratings showed Zuckerberg’s salary of $503,000 and bonus of $266,000 were eclipsed by stock options worth some $2.27 billion.
This was the first year the survey found any chief executive collected more than $1 billion, according to the GMI report released Tuesday.
One other CEO’s compensation also topped $1 billion in 2012, energy giant Kinder Morgan’s Richard Kinder, paid a salary of $1 and given stock worth more than $1.1 billion.
Those two overshadowed other CEOs, with the third-highest paid being Sirius XM Radio’s Mel Karmazin at $255 million, followed by Liberty Media’s Gregory Maffei ($254 million) and Apple’s Tim Cook ($143 million).
Maffei also collected $136 million for his role of CEO at Liberty Interactive Corp, the seventh highest on the list. Putting those two together would make him the third highest-paid with $390 million.
In the survey of 2,259 North American publicly traded companies, GMI said pay increased a median of 8.47 percent. For the companies in the Standard and Poor’s 500 index, compensation rose 19.65 percent at the median.
The massive compensation packages are generally due to stock awards, often in the form of options which allow a CEO to buy shares at a fixed price and cash in on gains.
GMI said Zuckerberg exercised 60 million stock options, granted in 2005 and fully vested by 2010, at a strike price of just six cents.
When Facebook went public in May 2012, Zuckerberg’s worth vaulted by more than $2.7 billion dollars on the difference.
GMI noted that while stock options are intended to align the interests of top executives with shareholders, “the unintended consequence of these grants is often windfall profits that come from small share price increases.”
The others in the top 10 list were Dick’s Sporting Goods’s CEO Edward Stack, paid $142 million, Starbucks’ Howard Schultz ($117 million), Salesforce’s Marc Benioff ($109 million) and Verisk Analytics’ Frank Coyne ($100 million).