Mark Zuckerberg to get $700 million annually from Meta’s new dividend
The new dividend and $50 billion in share buybacks announced by Meta may help garner more patience from investors for Mark Zuckerberg's long-term bets on AI and the metaverse.
Social media giant Meta Platforms Inc. has declared its inaugural dividend for investors, with CEO Mark Zuckerberg set to receive approximately $700 million per year, as per a Bloomberg report.
Meta has revealed a quarterly cash dividend of 50 pence per share for Class A and B common stock, commencing in March. Based on Zuckerberg's ownership of around 350 million shares, he stands to gain about $175 million in each quarterly payout before taxes, as per Bloomberg's data.
Strategic Implications
The decision to initiate dividend payments from Meta signals the company's perspective on its growth potential. While many rapidly expanding tech firms typically forgo dividends to reinvest earnings in new products or acquisitions, Meta's move is notable.
Despite substantial investments in artificial intelligence (AI) initiatives, the company faces regulatory challenges affecting its acquisition strategies.
Investor Outlook
Following Meta's workforce reduction of approximately 21,000 employees and a refocusing of priorities, the company's stock experienced a nearly threefold increase in 2023. The introduction of dividends, alongside an additional $50 billion in share buybacks, is anticipated to garner more support from investors, particularly in light of Zuckerberg's long-term commitments to artificial intelligence and the metaverse.
Meta's mega stock buyback appeared to ease investors' concerns over the company's spending on the “metaverse" — an immersive digital universe, viewed through a headset, that Zuckerberg predicts will eventually replace smartphones as the primary way people use technology.
In 2022, Zuckerberg's total compensation, including private security costs and a nominal base salary of $1, amounted to $27.1 million. However, executive compensation details for the past year are yet to be disclosed by Meta. The company's spokesperson has declined to comment on the matter.
Legal Troubles
Meanwhile, Zuckerberg on January 31 testified before the Senate Judiciary Committee's hearing on online child safety on Capitol Hill. At the US Senate on the impact that social media has on children hearing Zuckerberg apologised to families.
The CEOs of Meta, TikTok, X and other social media companies went before the Senate Judiciary Committee to testify at a time when lawmakers and parents are growing. They touted existing safety tools on their platforms and the work they’ve done with nonprofits and law enforcement to protect minors.
Meta is being sued by dozens of states that say it deliberately designs features on Instagram and Facebook that addict children to its platforms.
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First Published:2 Feb 2024, 06:35 AM IST
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