Meta Platforms increased its spending in at least one area. This decision was made despite revealing plans to reduce spending and increase speed, as they dubbed 2023 the "Year of Efficiency."
WASHINGTON, DC - OCTOBER 23: Facebook co-founder and CEO Mark Zuckerberg leaves the Rayburn House Office Building after testifying before the House Financial Services Committee for six hours on Capitol Hill October 23, 2019 in Washington, DC. Zuckerberg testified about Facebook's proposed cryptocurrency Libra, how his company will handle false and misleading information by political leaders during the 2020 campaign and how it handles its users’ data and privacy.Chip Somodevilla/Getty Images
(Photo : Chip Somodevilla/Getty Images) WASHINGTON, DC - OCTOBER 23: Facebook co-founder and CEO Mark Zuckerberg leaves the Rayburn House Office Building after testifying before the House Financial Services Committee for six hours on Capitol Hill October 23, 2019 in Washington, DC.
Increasing Costs for the CEO
During the fourth quarter earnings call with analysts, Meta revealed its plans to make cuts to prioritize efficiency in these trying times. But this statement contradicts Meta's decision to increase costs for Chief Executive Officer Mark Zuckerberg's personal security.
Bloomberg reported that Meta is increasing its pretax spending on the CEO's personal security by $14 million this year. This is much higher than the previous years, which only cost $10 million, based on a regulatory filing with the Securities and Exchange Commission.
This payment still does not include other expenses for security that the company will accrue on his behalf. Meta stated during the filing, "This increased allowance, together with the costs of Zuckerberg's existing overall security program, is appropriate and necessary under the circumstances."
The decision to increase the cost of personal security comes at a time when Meta and the CEO tried to cut spending in other areas, such as job cuts. Zuckerberg explained, "There are gonna be some areas that are going to be very rapidly growing, or that are very, kind of, future investments that we want to make."
Additionally, he described the management theme for 2023 as the "Year of Efficiency" in an effort to bounce back its focus on becoming a more substantial company this year. The company claims that they are going to be more proactive about cutting projects that are not performing well or may no longer be as crucial.
Meta also plans to flatten its organizational structure as a part of the plan. This can be done by removing middle managers and replacing them with artificial intelligence to increase productivity in the company. Last week, The Straits Times reported that Meta had delayed finalizing the budgets of multiple teams as a preparation for upcoming job cuts.
Importance of Personal Security
As per Business Insider's report, executives of major companies often travel with personal security in the possibility of them and their families receiving threats or being followed by paparazzi and aggressive fans.
For instance, Jeff Bezos, Marc Benioff, Larry Ellison, Elon Musk, and other well-known CEOs attribute millions of dollars dedicated only to security costs. But with the recent filing, Meta's Zuckerberg racks up the highest price among them all.
He faced several criticisms in the past for spending more on security than other areas. In 2021, Meta spent $26.8 million on security-related expenses dedicated only to Zuckerberg and his family, with a $10 million pretax allowance included.
