Facebook can fire Zuckerberg 'at will'

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By Press Trust of India | Updated: 5 June 2012 01:01 IST
Highlights
  • Facebook can terminate services of its chief Mark Zuckerberg at any time for any reason, or even without a reason, but the social networking giant's founder and CEO also enjoys similar exit rights.
Facebook can terminate services of its chief Mark Zuckerberg at any time for any reason, or even without a reason, but the social networking giant's founder and CEO also enjoys similar exit rights.

As per Facebook's employment agreement with Mr Zuckerberg, his tenure at the social networking giant would be on an "at will" basis, meaning his job can be terminated "at any time for any reason or no reason", either by him or by the company.

The company has disclosed Mr Zuckerberg's employment agreement, revised late last month, as part of an amended registration document for its upcoming IPO (Initial Public Offer) filed with the US market regulator Securities and Exchange Commission (SEC).

The global leader in social networking space is planning for a USD five billion dollar IPO, which could push Mr Zuckerberg and a few others into the league of billionaires, based on the valuation of their shareholding in the company.

While the job duties, title, compensation and benefits, as well as the company's personnel policies and procedures, might change from time to time, the 'at will' nature of Mr Zuckerberg's employment can be changed only after a written agreement approved by the Facebook board.

The employment agreement of Facebook's Chief Operating Officer (COO) Sheryl Sandberg also has an 'at-will' clause.

Ms Sandberg's agreement also provides for reimbursement of her business expenses by Facebook, although that of Mr Zuckerberg has no such clause.

One of the clauses also bars Mr Zuckerberg from creating a rival to Facebook.

As per the agreement, Mr Zuckerberg cannot "assist any person or entity in competing with the company, in preparing to compete with the company or in hiring any employees or consultants of the company."

Similar clauses apply to Chief Operating Officer (COO) Sheryl Sandberg, Chief Financial Officer (CFO) David Ebersman and Vice President (Engineering) Mike Schroepfer, for the period these people are rendering their services to Facebook.

The agreements are silent on whether these people, including Mr Zuckerberg, can help create a rival to Facebook after leaving the company.

The company said that Mr Zuckerberg, as President and CEO, would get USD 500,000 of base salary and up to 45 per cent of this amount as bonus every year.

Ms Sandberg and Mr Ebersman would get an annual base salary of USD 300,000 each, while the same for Mr Schroepfer would be USD 275,000. All the three executives would be entitled for a bonus payment of up to 45 per cent of their base earnings.

The collective base salary and bonus of the four executives stand at USD 1.99 million (about Rs 10 crore).
 

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