Twitter CEO Jack Dorsey did not make any money in salaries, stock awards or bonuses last year, but still the company spent a sizable amount on him. However, to everyone’s surprise, the amount spent is not paid directly to Dorsey, but rather, it was spent on his security.
Dorsey very important to Twitter
According to a Twitter filing with the Securities and Exchange Commission (SEC), Dorsey received more than $68,500 in security services. The micro-blogging giant paid more than $43,000 for previous CEO Dick Costolo for the same security services. In a footnote embedded deep inside a recent Twitter filing, the company said that for Dorsey’s “residential security and protective detail” in 2015, it paid $68,506, notes Fortune.
Twitter shareholders were growing concerned about the stagnating growth of the micro-blogging site. They were worried because other services like Snapchat, Instagram and other platforms are attracting more users. There have been other problems as well. Despite the growing revenue, the social media platform has lost money each year since 2012; for instance, it generated $2.2 billion in revenue in 2015 but lost around $521 million. Such problems have been noticed by shareholders as Twitter shares were down by more than 65% last year.
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After a few disorderly years, Dorsey was brought back to spearhead the micro-blogging site last year. Dorsey also co-founded Square, a mobile-payments company where he serves as chief executive as well. Dorsey is looked upon as one person who can get Twitter out of this mess, so by protecting him, Twitter is actually protecting itself. Also the company’s fight against the Islamic State may be the reason it is spending so much to protect its CEO.
Not the first to pay for CEO’s security
Twitter is not the first company to protect its executive. Other companies like Disney, Berkshire Hathaway, and Oracle also paid massive sums over the years to protect their executives. For instance, Oracle spends around $1.5 million in protecting its CEO Larry Ellison.
Equilar, which tracks executive compensation, released an analysis of Fortune 100 data last year to determine how much companies have been paying to protect their CEOs. Amazon paid $1.6 million in 2013 for the security of its CEO Jeff Bezos. The online retail giant did not disclose exactly why it paid so much for security, but they did say that the cost was necessary and reasonable for the e-commerce giant’s “benefit.”
The average Fortune 100 company spends approximately $30,000 a year for executive security, revealed Equilar. The higher costs can often be due to one-time fees, including the installation of security equipment, the company added.