01—Abstract
Summary
Summary of the 10-K/A filed April 27, 2016. Cited figures are marked; the original filing is the authoritative source.
This 10-K filing from Meta Platforms, Inc. (META) for the fiscal year ending December 30, 2015, primarily details the company's corporate governance, executive compensation, and related stockholder matters.
The filing highlights the company's leadership team, including Chairman and CEO Mark Zuckerberg, COO Sheryl Sandberg, and CFO David Wehner. A key focus is the executive compensation strategy, which heavily emphasizes long-term equity incentives (RSUs) to align executive interests with stockholders, while cash compensation is generally kept below market levels relative to peers. Meta operates under a "controlled company" status due to Mark Zuckerberg's majority voting power, which exempts it from certain NASDAQ corporate governance rules.
However, the company voluntarily maintains a majority independent board and an independent compensation & governance committee. The filing also details director compensation, security ownership, and principal accounting fees, underscoring a commitment to transparency and aligning executive incentives with long-term company performance and stockholder value.
02—Key points
Key Highlights
- Mark Zuckerberg, as Founder, Chairman, and CEO, retains significant control and voting power, with a nominal $1 annual salary and a compensation structure heavily weighted towards equity.
- Executive compensation strategy heavily favors equity awards (Restricted Stock Units - RSUs) to promote long-term alignment with stockholder interests, with cash compensation generally below market peer levels.
- Meta operates as a 'controlled company' due to Mark Zuckerberg's majority voting power, yet voluntarily maintains a majority independent board and an independent compensation & governance committee.
- The Compensation & Governance Committee is composed entirely of independent directors and oversees executive compensation, relying on an independent compensation consultant (Compensia).
- RSU grants to executives often feature deferred vesting start dates to enhance long-term retention and incentivize continued service.
- Directors receive annual retainers and RSU grants as compensation, with specific committee members receiving additional retainers.
- The filing details security ownership, with Mark Zuckerberg holding a significant majority of the voting power through Class B shares.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Meta Platforms, Inc. kept $0.21.
- Revenue$17.93B100.0%
- Cost of revenue−$2.87B16.0%
- Gross profit$15.06B84.0%
- Operating costs−$8.84B49.3%
- Operating income$6.22B34.7%
- Interest, other & tax−$2.54B14.2%
- Net income$3.69B20.6%
Where FY2015 revenue went
$17.93B- R&D: $4.82B, 27% of revenue
- Other operating costs: $4.02B, 22% of revenue
- Net income: $3.69B, 21% of revenue
- Cost of revenue: $2.87B, 16% of revenue
- Interest, other & tax: $2.54B, 14% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2015filed April 27, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $17.93B$12.47B | +43.8% |
| Cost of Revenue | $2.87B$2.15B | +33.2% |
| Gross Profit | $15.06B$10.31B | +46.0% |
| R&D Expenses | $4.82B$2.67B | +80.6% |
| Operating Expenses | $11.70B$7.47B | +56.6% |
| Operating Income | $6.22B$4.99B | +24.6% |
| Interest Expense | $23.00M$23.00M | 0.0% |
| Net Income | $3.69B$2.94B | +25.4% |
| EPS (Basic) | $1.31$1.12 | +17.0% |
| EPS (Diluted) | $1.29$1.10 | +17.3% |
| Shares Outstanding (Basic) | 2.80B2.61B | +7.2% |
| Shares Outstanding (Diluted) | 2.85B2.66B | +7.1% |
05—Questions
Frequently Asked Questions
What is Meta's approach to executive compensation, particularly for its top executives?
Meta's executive compensation philosophy prioritizes attracting and retaining top talent by heavily weighting compensation towards equity awards, specifically Restricted Stock Units (RSUs). This approach aims to align executives' long-term interests with those of stockholders. Cash compensation, including base salary and bonuses, is generally positioned below market levels compared to peer companies. Mark Zuckerberg, as founder and CEO, receives a token $1 annual salary and his compensation is primarily driven by his significant equity stake.
How does Meta's corporate governance structure reflect its ownership and control?
Meta is classified as a 'controlled company' under NASDAQ rules because Mark Zuckerberg, as Chairman and CEO, holds a majority of the company's voting power through his Class B shares. This status exempts Meta from certain independence requirements for its board and committees. However, Meta voluntarily maintains a majority of independent directors on its board and ensures its Compensation & Governance Committee is composed entirely of independent directors.
What role do RSU grants play in executive compensation and retention?
Restricted Stock Units (RSUs) are a core component of Meta's executive compensation strategy. They are designed to align executive and stockholder interests over the long term. A significant feature of these grants for executives is the use of deferred vesting start dates. This structure incentivizes executives to remain with the company for extended periods, as their equity awards begin to vest only after a considerable period of continued employment, thereby serving as a strong retention tool.
How are directors compensated, and what is the role of independent directors?
Non-employee directors receive an annual cash retainer and RSU grants. Specific board committee members, such as the Audit Committee chair, receive additional retainers. While Meta is a controlled company, it has opted for a majority independent board and an independent Compensation & Governance Committee. Dr. Susan Desmond-Hellmann serves as the Lead Independent Director, providing a liaison between the Chairman and independent directors and presiding over executive sessions.
06—Continue