Snap released its first annual report as a public company on Thursday, and the report revealed just how much power is behind CEO Evan Spiegel.
Spiegel's salary — minus hefty stock awards — comes out to only $1. But he controls 48.4 percent of total voting power for the company, the annual report reveals.
Spiegel's post-IPO bonus was worth $637 million and represented 3 percent of the total shares outstanding at the time of the IPO. It will be paid out over three years, tightening his control of the stock over time.
But there is "no continuing service requirement" for Spiegel, the compensation description said, even though at least one other executive faces a vesting period of more than a decade for stock awards. Spiegel will continue to have voting power even if he is terminated.
The document also says that Snap only considers there to be one "segment" of its business, run by Spiegel, because "there are no segment managers who are held accountable by the chief operating decision maker for operations, operating results, and planning for levels or components below the consolidated unit level."
Spiegel's arrangement with Snap includes other odd provisions, including a $561,892 security detail. (Apple CEO Tim Cook spent less than half that much, at $224,216 in 2017). The document says that Spiegel has "received threats in the past" and is "likely to continue to receive threats in the future."
Snap paid $14,241.63 to a law firm where Spiegel's father is a partner, as part of legal fees associated with Spiegel's compensation. Snap's general counsel is also a former lawyer of that firm, and the report says Spiegel's father "has not personally provided any material legal services" to Snap.
Spiegel's co-founder, Bobby Murphy, is the second-largest shareholder, with 47.4 percent voting power. The two essentially control all shares, and if one of them dies or becomes incapacitated, the other takes over all voting rights for those shares.
In case other shareholders needed the warning of the risks of having no control over the company, it's right here: "As stockholders, even controlling stockholders, Mr. Spiegel and Mr. Murphy are entitled to vote their shares, and shares over which they have voting control, in their own interests, which may not always be in the interests of our stockholders generally."
Snap shares were down more than 7 percent on Thursday morning, following the release of the 10-K, although a tweet by reality TV star Kylie Jenner slamming the company's recent app redesign may also have been a contributing factor.
Disclosure: CNBC parent NBCUniversal is an investor in Snap.
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