Facebook employees made so much money from the company going public last year that it shot San Mateo County, where the company is headquartered, to the top of the charts for highest average weekly income in the nation.
San Mateo average wages rose to a rate equivalent to yearly earnings of $168,000, significantly higher than even New York County, home of Wall Street and several other high-earning industries.
The Wall Street Journal’s Scott Thurm verified that Facebook’s IPO was responsible for the massive increase by looking at the wages by job sector.
He found that the roughly 6,200 “industrial” workers (which Facebook employees count as) earned $6.8 billion in the fourth quarter of 2012 – which works out to almost $83,000 a week. This lines up with the timing for many Facebook employee’s stock options, which vested in November of last year.
This isn’t the first time that a tech company going public has made a significant number of its employees exceedingly rich. Microsoft compensated many early employees with generous stock options. After a hundredfold increase in its stock price between 1986 and 1996 it was estimated that at least 10,000 “Microsoft millionaires” were created by 2000.
“The hypocrisy in Silicon Valley’s big talk on innovation”:
None of this argues for government keeping its nose out of the business of innovation, it makes the case for it taking a leading role – for leveraging its unique position to address these obvious market failures. Only governments had the long view and available cash to fund things like supercolliders, deep space programs and – oh yeah – the development of the Internet.
The tragedy is the United States has defunded many such ambitious research efforts in recent years, amid a climate of deficit paranoia, antitax rhetoric and general government bashing – sometimes by the very people who made fortunes off its creations.
It’s not enough to just release better products each year. If the United States is to remain at the forefront of research and technology, innovation needs to be a national priority. That means funding the scientists and engineers working on the cool technologies of twenty years from now, not cutting spending and hoping that Bay Area execs will take some time off from figuring out how to profit from you posting pictures of your cat in order to go cure cancer.
You’d think the people profiting off of the Internet would get that.