FORTUNE — Twitter does not provide its outside directors with annual salaries, but it’s unlikely that they’re complaining.
The micro-messaging service disclosed yesterday that its outside directors may earn upwards of $16 million in compensation this year, as first reported by
Footnoted
. It also seems to provide for up to $8 million per year going forward, or $16 million for a new director in his or her first year of service. Here’s the relevant passage:
Outside Directors. Our 2013 Plan provides that all outside directors will be eligible to receive all types of awards (except for incentive stock options) under our 2013 Plan. In connection with this offering, we intend to implement a formal policy pursuant to which our outside directors will be eligible to receive equity awards under our 2013 Plan. Our 2013 Plan provides that in any given year, an outside director will not receive (i) cash-settled awards having a grant-date fair value greater than $4 million, increased to $8 million in connection with his or her initial service; and (ii) stock-settled awards having a grant-date fair value greater than $4 million, increased to $8 million in connection with his or her initial service, in each case, as determined under GAAP.
Twitter has six outside directors, including chairman Jack Dorsey and venture capitalist Peter Fenton (who is a partner with longtime Twitter investor Benchmark), both of whom already have significant financial interests in the company. Directors Peter Currie and David Rosenblatt each have been granted 400,000 options so far, grants that could be worth in excess of $8 million (depending on Twitter’s ultimate share price).
RELATED: Twitter’s huge payday for early investors
It’s a remarkable bounty, at least relative to what Facebook (FB) directors were getting before that company’s May 2012 IPO.
Facebook paid each director a $50,000 annual salary, plus another $20,000 for the audit committee chairman. As for stock grants, however, those only went to the two outside directors who didn’t already have oodles Facebook stock via personal or VC firm investments — Erskine Bowles and Reed Hastings — and each was valued at just $618,000. Or, put another way, being a Twitter board member is at least 24 times more valuable than being a Facebook board member.
UPDATE: A source familiar with the situation is saying that Footnoted read part of this clause wrong, saying that the $16 million figure is a maximum rather than a minimum. Moreover, he adds that Facebook put no limits whatsoever on its director payments, so this actually serves as a shareholder protection mechanism.
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