Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Zuckerberg Is the Billion-Share Man: Who Owns What, Who Makes What in the Facebook IPO

In what is probably the most anticipated document ever received by the U.S. Securities and Exchange Commission, Facebook has filed to take its company public in a $5 billion initial public offering later this year.

Having endured lots of speculation around who owns exactly how much, there are now some hard numbers from the S-1 filing that hit the SEC Web site today.

Here are some details of the cap table, which is made up of both Class A and Class B shares, which carry different voting powers. Class B are the common shares.

Not surprisingly, co-founder and CEO Mark Zuckerberg owns the most equity of any single person. His 1.1 billion Class B shares give him almost a 57 percent stake — about half of which he owns and half of which are owned by others but over which he exercises proxy voting authority.

The 27-year-old entrepreneur also holds 42.2 million Class A shares, which represents a 36.1 percent stake of that group.

Facebook’s filing said he will sell some shares in the IPO, although it doesn’t specify how many. However, it noted that most of the proceeds from the sale will go toward paying taxes on his purchase of 120 million options of Class B common stock he also has.

Peter Thiel, the PayPal founder and CEO who sold that company to eBay, owns a 2.5 percent stake, which has decreased over time from the more than 10 percent he owned as Facebook’s first angel investor. Not bad for a $500,000 investment made in 2004.

Jim Breyer of Accel Partners controls more than 201 million Class B shares, amounting to a little more than 11 percent of Facebook’s equity, having led Accel’s participation in Facebook’s $25 million Series A way back in 2006. Breyer is also a personal investor; 11.7 million shares are his, and about 190 million shares are Accel’s.

Digital Sky Technologies, the Russian investment firm, has 5.4 percent of the Class B equity, or 94.6 million shares, owing to its $200 million investment in 2009, plus an additional $500 million in 2011. DST has also been buying Facebook shares from existing shareholders, allowing some to cash out their equity. It also has 36.7 million Class A shares, or 31.4 percent.

Goldman Sachs has a sizable 66-million share slice of Class A shares, or 56.3 percent. Last year, it was involved in the $1.5 billion round that included DST.

There’s also a batch of individuals with single-digit stakes and smaller ones of note.

Dustin Moskovitz: The Facebook co-founder owns 7.6 percent of the company or 133.8 million Class B shares.

Zuckerberg’s father, Edward Zuckerberg, a dentist, was rewarded with two million Class B shares in consideration for his providing early start-up capital to his son in 2004 and 2005. He was given an option to purchase the shares, but the option expired a year after it was given to him, without his exercising it. The board of directors — minus Mark Zuckerberg — issued the 2 million shares to Glate LLC, a company controlled by the elder Zuckerberg.

There are also a few names of note who don’t appear in the filing:

Microsoft had bought a stake amounting to 1.6 percent, stemming from its $240 million investment in 2007, which included a strategic alliance for advertising. Its stake, now likely less, is not mentioned in the filing.

Eduardo Saverin, the Brazilian co-founder, also has a stake worth a few points, but he is not mentioned in its cap tables.

And other VC investors, Greylock Partners and Meritech Capital Partners, are barely mentioned as well. T. Rowe Price owns 6 million Class A shares, or 5.2 percent, as well as 12.1 million Class B shares.

The filing shows that the top five highest compensated employees are:

Mark Zuckerberg’s base salary is $500,000 a year. Effective January 1, 2013, his salary will be reduced to $1 per year. He has options to buy 120 million additional shares of the class B common stock at a strike price of six cents a share, which expires in November of 2015.

COO Sheryl Sandberg made $382,000 in salary and bonuses in 2011 and received $30.5 million in stock awards. She has options to buy 4.7 million shares, of which 3.5 million have a strike price of $10.39, and 1.2 million a strike price of $15. Sandberg already holds 1.9 million shares of Class B common shares and holds 39.3 million restricted stock units, too.

David Ebersman, the quiet CFO whom AllThingsD profiled yesterday, made $382,000 in salary and bonuses and has 2.2 million Class B shares and 7.5 million RSUs.

Mike Schroepfer, vice president of engineering, made $334,000 in salary and bonuses last year. He holds 2.1 million in Class B shares and 6.1 million RSUs.

VP and general counsel Theodore W. Ullyot also makes $275,000 per year and is eligible for a $400,000 annual retention bonus during the first five years of his employment, through 2013. He has about 1.9 million shares and exercisable options and holds 3.8 million RSUs.

Then, there are Facebook’s outside directors: Venture capitalist Marc Andreessen; Erskine Bowles, the former White House Chief of Staff under Bill Clinton; Breyer; Washington Post CEO Don Graham; Netflix CEO Reed Hastings; and Thiel. Each were paid $16,700 in fees for sitting on the board. Bowles got 601,400 shares, while Hastings got 593,400 shares.

Andreessen also has 5.3 millon RSUs that vest over four years. Graham has one million RSUs. Bowles and Hastings also each have 20,000 RSUs.


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