Facebook CEO Joined $1 Salary Club to Reduce Tax Bite
Who said the rich and famous don’t need to worry about their tax bill? Facebook CEO, Mark Zuckerberg, joined the CEO $1 salary club in 2013 to take the bite out of his tax bill.
Typically CEOs have been known to lower their salaries to $1 after their company’s stock takes off and Mark Zuckerberg was no different.
Since he knew his stock options would be heavily taxed, Zuckerberg limited his Facebook salary to $1, however his reduction in salary didn’t help him eliminate his tax bill too much since he racked up a 3.3 billion gain last year by exercising his stock options in Facebook.
But what does that mean for his taxes?
Since the IRS may view stock options as ordinary income if they are held for less than one year, Zuckerberg will be taxed at the top federal tax rate of 39.6% and his tax liability is estimated at $2.3 billion.
Zuckerberg being the man with the plan is covering his tax bill by selling 41.4 million of his Facebook shares worth 2.3 billion and making a substantial charitable deduction.