FORTUNE -- Twitter does not provide its outside directors with annual salaries, but it's unlikely that they're complaining.
The micro-messaging service disclosed yesterday that its outside directors may earn upwards of $16 million in compensation this year, as first reported by Footnoted. It also seems to provide for up to $8 million per year going forward, or $16 million for a new director in his or her first year of service. Here's the relevant passage:
Outside Directors. Our 2013 Plan provides that all outside directors will be eligible to receive all types of awards (except for incentive stock options) under our 2013 Plan. In connection with this offering, we intend to implement a formal policy pursuant to which our outside directors will be eligible to receive equity awards under our 2013 Plan. Our 2013 Plan provides that in any given year, an outside director will not receive (i) cash-settled awards having a grant-date fair value greater than $4 million, increased to $8 million in connection with his or her initial service; and (ii) stock-settled awards having a grant-date fair value greater than $4 million, increased to $8 million in connection with his or her initial service, in each case, as determined under GAAP.
Twitter has six outside directors, including chairman Jack Dorsey and venture capitalist Peter Fenton (who is a partner with longtime Twitter investor Benchmark), both of whom already have significant financial interests in the company. Directors Peter Currie and David Rosenblatt each have been granted 400,000 options so far, grants that could be worth in excess of $8 million (depending on Twitter's ultimate share price).
It's a remarkable bounty, at least relative to what Facebook (FB) directors were getting before that company's May 2012 IPO.
Facebook paid each director a $50,000 annual salary, plus another $20,000 for the audit committee chairman. As for stock grants, however, those only went to the two outside directors who didn't already have oodles Facebook stock via personal or VC firm investments -- Erskine Bowles and Reed Hastings -- and each was valued at just $618,000. Or, put another way, being a Twitter board member is at least 24 times more valuable than being a Facebook board member.
UPDATE: A source familiar with the situation is saying that Footnoted read part of this clause wrong, saying that the $16 million figure is a maximum rather than a minimum. Moreover, he adds that Facebook put no limits whatsoever on its director payments, so this actually serves as a shareholder protection mechanism.
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Startups should keep employee upside in equity.
By Eric Paley
FORTUNE -- Venture-backed startups are incredibly ambitious. A startup team comes together to try to create something highly improbable and well beyond what can reasonably be expected given the scarce resources at hand. Once financed, everyone at the startup should have a reasonable salary, but the real compensation for achieving the improbable is equity.
Inevitably, I get into a discussion with my MOREMay 6, 2013 2:53 PM ET
Bonuses certainly aren't what they used to be before the crisis, but it still pays to be on Wall Street -- at least for those who've held onto their jobs.Nin-Hai Tseng, Writer - Apr 24, 2013 10:06 AM ET
What if you announced a $10 billion stock buyback and drew a bunch of yawns in response?
That's where Goldman Sachs (GS) finds itself a week after its disappointingly soft second quarter. The torpid reaction is only the latest sign that a weak economy, creaky markets and tightening capital rules are squeezing the once mighty megabanks.
Perhaps hoping to ease some of the sting of its rare earnings miss, Goldman said last MOREColin Barr - Jul 26, 2011 7:35 AM ET
JPMorgan bankers had another big year, though by their standards it wasn't anything to write home about.
The average worker at the investment banking unit of JPMorgan Chase (JPM) made $369,651 last year, according to numbers (see page 10) released Friday in the bank's fourth-quarter earnings report. That's down 2% from a year ago and in line with the investment bank's 4% annual profit decline.
The bank actually set aside a bit more MOREColin Barr - Jan 14, 2011 10:53 AM ET
Get out your hanky. Goldman Sachs bankers are making less money.
The investment bank's average paycheck is running 30% behind year-ago levels, thanks to a trading lull that has pushed down Goldman's (GS) profits.
So far in 2010, the firm has set aside $13 billion for pay and perks. That works out to $370,706 for each Goldman employee.
That's a nice take, obviously, exceeding seven times median household income, and it only stands MOREColin Barr - Oct 19, 2010 10:11 AM ET
Even Goldman Sachs is struggling to navigate Wall Street's trading doldrums.
The investment bank posted a 40% profit decline for its third quarter Tuesday, citing a steep drop in its huge trading business.
For the quarter ended last month, New York-based Goldman (GS) made $1.9 billion, or $2.98 a share. Revenue fell 28% from a year earlier to $8.9 billion.
Analysts surveyed by Thomson Financial were expecting the firm to make $2.28 a share, MOREColin Barr - Oct 19, 2010 8:06 AM ET
Banker bonus backlash is so 2009.
Citi (C) is forking over $30 million to hire a top UBS energy banker and his team. The move comes after a bidding war for Stephen Trauber's services that will, at least briefly, give Trauber a salary 9 million times the size of Citi chief Vikram Pandit's – a rare instance of the CEO pay gap in reverse.
(Update: Citi contends the $30 million figure "is totally MOREColin Barr - Sep 27, 2010 12:07 PM ET
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