Facebook approves $10 million to protect CEO a day before losing $16.8 billion

In a report by Yahoo Finance, the social networking giant approved the sum of $10 million in annual security costs for Mark Zuckerberg and his family.

Facebook announced the increase in the pre-tax allowance security for Zuckerberg in a SEC filing on Thursday, July 26, 2018.

It was further reported that the 34-year-old American technology entrepreneur can spend the funds on his bodyguards, security measures for his houses, and private aircraft.

ALSO READ: Mark Zuckerberg lost $16.8 billion in 2 hours

Here's Facebook filing to SEC:

"As previously disclosed, the Compensation & Governance Committee (the Committee) of our Board of Directors has authorized an overall security program for Mark Zuckerberg to address safety concerns due to specific threats to his safety arising directly as a result of his position as Facebook’s founder, Chairman, and CEO.

"We require security measures for the company’s benefit because of the importance of Mr. Zuckerberg to Facebook.

"The Committee regularly reviews Mr. Zuckerberg’s security program and the related costs, which vary from year to year depending on requisite security measures, Mr. Zuckerberg’s travel schedule, and other factors.

"On July 24, 2018, the Committee approved an annual pre-tax allowance of $10 million to Mr. Zuckerberg to cover additional costs related to his and his family’s personal security.

This allowance will be in addition to the continued funding of Mr. Zuckerberg’s overall security program to cover the costs of security personnel for his protection; the procurement, installation, and maintenance of certain required security measures for his residences; and the usage of private aircraft for personal travel.

This allowance will be paid to Mr. Zuckerberg net of required tax withholdings, and Mr. Zuckerberg may apply the net proceeds to pay for additional personnel, equipment, services, residential improvements, or other security-related costs."

ALSO READ: Zuckerberg's $16.8bn loss is more than Dangote’s net worth

Facebook justifies $10 million security vote for Zuckerberg

Facebook has justified the security vote for Zuckerberg in 2018 saying it's for the company's benefit because of the importance of the CEO to Facebook.

"In approving this annual security allowance, the Committee considered Mr. Zuckerberg’s position and importance to Facebook and the fact that Mr. Zuckerberg has requested to receive only $1 in annual salary and does not receive any bonus payments or equity awards.

"The Committee also considered comparative data from the peer group of companies that Facebook benchmarks against for executive compensation purposes, as well as other relevant information regarding executive compensation and perquisites.

"The Committee believes that this allowance, together with the costs of Mr. Zuckerberg’s existing overall security program, are appropriate and necessary under the circumstances," the filing further said.

Mark Elliot Zuckerberg is currently worth $67.1 billion, according to Forbes, even after Facebook shares dropped 19% on Wednesday, July 25, 2018.