Twitter had an interesting rule about compensation that was in effect until just a few years ago.
Everyone at Twitter, from the CEO down to the hot-shot software engineer, was subject to a $US200,000 a year salary cap.
“It used to be that the highest salary was $US200,000. Nobody made more than that and a lot of people made a lot less,” one former Twitter employee tells us.
Of course, Twitter employees and executives got a lot more money in the form of equity which they knew could be worth millions of dollars after the company went public, which it did in 2013. But that equity was generally not liquid during the pre-IPO days, save for a few special occasions in which Twitter allowed employees to sell some of their stock to investors.
In most places a $US200,000 a year salary would be considered a pretty rich paycheck. But the world of tech operates by a different yardstick. Some of the top brass at Google, for instance, earn $US650,000 in annual salary (not including stock), while Yahoo CEO Marisa Mayer has collected a salary of $US1 million for each of the past two years (again, not including other forms of compensation such as stock and bonuses).
The issue of Twitter’s compensation has come up as the company’s management has come under fire for failing to deliver results. The company’s underwhelming performance has made the compensation of some current Twitter executives, such as CFO Anthony Noto, an easy target.
While the salaries at Twitter have not increased that much without the cap, the scale of the overall compensation, including stock and bonuses, have ballooned.
Noto for instance had a whopping $US73 million in total compensation in 2014, most of it in the form of stock — his annual salary was $US124,038.
Twitter’s head of engineering Alex Roetter had a total compensation package of $US19 million in 2014, with $US276,712 in annual salary, while product boss Kevin Weil had a total compensation package of $US13 million, with $US252,056 in annual salary.
As for CEO Dick Costolo, his salary has shrunk from $US200,000 in 2012 to $US13,892 in 2014. Costolo has also not touched any stock awards for the past two years, although his total compensation including stock awards back in 2012 was $US11.5 million.
We’ve reached out to Twitter for comment and will update when we hear back.