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April 30, 2016

Facebook Inc revealed that it spent $4.26 million on security for Mark Zuckerberg last year, its first disclosure of such costs, and the highest among companies in the Standard & Poor's 500 Index that have filed proxy statements for fiscal 2015.

The expense brings the total cost from 2013 to 2015 to $12.5 million, according to a regulatory filing. The cost was "to address safety concerns due to specific threats to his safety arising directly as a result of his position as our founder, chairman, and CEO," the company said in the filing. 
Zuckerberg is the world's eighth-richest person with $47 billion, according to the Bloomberg Billionaires Index.

Facebook spent $5.6 million for Zuckerberg's security in 2014 and $2.65 million in 2013. Last year's expense exceeds the $1.53 million Oracle Corp spent to protect executive chairman Larry Ellison in fiscal 2015 and Amazon.com Inc's $1.6 million for Jeff Bezos, according to data compiled by Bloomberg. The figure also outstrips other famous executives. Berkshire Hathaway Inc paid $370,244 for personal and home security for billionaire Warren Buffett in 2015. Apple Inc spent $209,151 on Tim Cook.

Facebook made the disclosure this week after the US Securities and Exchange Commission in August questioned why the costs had never been listed in filings as a taxable perquisite. In response, Facebook argued that a "business oriented security concern" identified for Zuckerberg exempted it from having to report those expenses. After discussions with SEC staff, the company reversed its position, according to a filing. Facebook spokesman Jonathan Thaw declined to comment.


FB provides Zuckerberg with a home security system and guards who also protect his house in San Francisco's Mission District. The team is overseen by a former US Secret Service agent who protected President Barack Obama.


Security "should be a board of directors' first and foremost concern," especially at companies built around a central figure, said Peter Martin, chief executive of security consultancy Afimac Global.

That doesn't come cheap. Each around-the-clock assignment requires four full-time guards, which annually can cost more than $80,000 each, said Christopher Falkenberg, chief executive of New York-based Insite Security Inc. A security director can earn about $200,000 a year.

 

 

 


 

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