Meta Platforms Inc., the tech conglomerate that owns Facebook, has made a significant announcement that is set to notably boost CEO Mark Zuckerberg’s income. The company is initiating its first-ever dividend, with payments commencing this March.
Shareholders of Meta’s Class A and B common stock can anticipate a quarterly cash dividend of 50 cents per share. Given that Zuckerberg has approximately 350 million shares to his name, he is expected to receive roughly $175 million every quarter before taxes. This figure is based on data gathered by Bloomberg.
The decision to pay dividends is generally interpreted as a company’s statement on its future growth potential. In the technology sector, particularly amongst rapidly growing firms, it is common to reinvest earnings back into the business to fund the development of new products or to pursue acquisitions. However, Meta’s move suggests a shift, especially as the company has encountered regulatory hurdles diminishing its capacity for acquisitions.
In the aftermath of reducing its workforce by about 21,000 employees and focusing on a narrower set of goals, Meta’s stock has shown impressive growth, nearly tripling in value in 2023. The declaration of the new dividend alongside an additional $50 billion allocation for share repurchases could help garner investor support for Zuckerberg’s long-term investments in artificial intelligence and the metaverse.
According to filings, Zuckerberg’s total compensation for the year 2022 amounted to $27.1 million, which includes costs for his private security and a nominal base salary of $1. The company has yet to release executive compensation details for the past year.
With this strategic financial decision, Meta Platforms embarks on a new chapter, potentially reshaping investor perceptions and the company’s growth trajectory.
