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Meta to pay its chief Mark Zuckerberg 5,800 crore annually as new dividend

Feb 02, 2024 08:07 AM IST

Meta Platforms issued its first dividend while reporting revenue and profit that beat expectations on robust ad sales.

Meta Platforms introduced its first-ever dividend, alongside reporting better-than-expected revenue and profit driven by strong ad sales during the holiday shopping season. With this, chief executive Mark Zuckerberg could potentially receive an annual payout of around $700 million ( 5,800 crore) from this historic dividend for investors.

Meta's CEO Mark Zuckerberg (REUTERS)

The company declared a quarterly cash dividend of 50 cents per share for Class A and B common stock, starting in March. Given Zuckerberg's ownership of approximately 350 million shares, he stands to gain roughly $175 million in each quarterly payment before taxes, Bloomberg reported.

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DETAIL READ- Facebook parent Meta declares first dividend, shares jump

Why is Meta offering dividends?

Meta's decision to pay dividends gives an outlook on its future growth plans. Unlike many fast-growing tech companies that use earnings for new products or acquisitions, Meta is opting for dividends.

While they're investing heavily in artificial intelligence, regulatory challenges limit their ability to make big acquisitions.

After Meta laid off about 21,000 employees and narrowed its focus, the stock almost tripled in 2023.

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To cool down investors?

The introduction of a new dividend and an extra $50 billion for share buybacks announced alongside the favourable result might encourage more patience from investors, supporting Mark Zuckerberg's long-term bets on artificial intelligence and the metaverse.

How much is Meta CEO Zuckerberg's salary?

According to data available from filings, in 2022, Zuckerberg earned $27.1 million in total, covering his base salary of $1 and private security expenses, as per filings.

Meta has not disclosed executive compensation for 2023.

How has market reacted to the decision?

After the market closed, Meta's shares jumped more than 14 per cent, boosting the company's value by over $140 billion. The after-hours gains alone were more than five times the entire value of social media rival Snap Inc.

ALSO READ- Should Tesla change state? Elon Musk launches poll after $56bn pay deal setback

Facebook turns 20 this week

Meta, formerly known as Facebook, is set to celebrate the 20th anniversary of its flagship social network platform. Facebook was established in a college dorm room on February 4, 2004. Since then the company has evolved into the world's largest social media entity, linking over 3 billion people worldwide.

(Inputs from wires)

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