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Big Tech spent Big Bucks on security

Money

Good morning! This Thursday, the costly job of keeping executives safe, SpaceX holds bitcoin, the FTC is taking on right to repair, and a look under the hood of TikTok's algorithm.

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The Big Story

Safety comes at a hefty price

Corporate security programs are used to dealing with a litany of threats, from kidnapping to cyberattacks. But 2020 had a new kind of peril: a pandemic. First there was the health threat, which meant increased security protocols and transforming home offices into secure workspaces. But there was also an increased number of threats during a year of civil unrest, elections and a population stuck at home.

"If someone was a little bit wacky, they became a lot wacky," said World Protection Group's Kent Moyer, who manages security for high-net-worth individuals and tech clients.

  • His team spent the year building out more-robust home security systems, revamping safe rooms, using drones to map out sprawling estates and responding to threats of intruders.
  • Stay-at-home orders may have cut down on travel expenses, but a Protocol analysis of executive security costs in the tech industry shows that companies like Facebook, Google and Apple all ended up paying more for personal security in 2020 than in previous years as a result of the pandemic.

Facebook pays the most to protect its top execs. Mark Zuckerberg's total was over $23 million this year, thanks to an annual $10 million stipend plus an additional $13 million in security costs.

  • Sheryl Sandberg's protection is another $7 million expense. (Full disclosure: My husband works at Facebook.)

But Facebook's not the only one: Google, Oracle, Snap, Lyft and Salesforce all ended up paying more to keep their CEOs safe in 2020.

  • Lyft's president, John Zimmer, is one of the more costly execs to protect at over $2 million in 2020.
  • As Zoom's spotlight grew, the company paid out over $600,000 in personal security for its CEO, Eric Yuan.
  • Amazon's Andy Jassy, who would take over as CEO in 2021, also had security costs listed for the first time: $30,831 for 2020.

The 24/7 nature of working from home likely contributed to the rise of personal security costs. The SEC mandates that companies disclose spending for the personal benefit of their named executive officers — perks like 401(k) matches, health care concierge services and personal security.

  • "If an executive has a bodyguard, or a chauffeur who acts as a bodyguard who accompanies them when they're out on official company business, that wouldn't tend to get disclosed," said Compensia's Mark Borges. "What happens, though, is usually the security measures are 24/7, so there's a chunk that is considered a personal expense because it's tied to activities, places or time when the executive supposedly is not on duty or involved in performing their role as executive for the company."

Still, lots of executives shoulder the costs of their own security outside of the office. Amazon's Jeff Bezos receives the same flat $1.6 million every year, then pays the rest of his way. Microsoft doesn't even list personal security costs for its execs because they pay for their own. The pandemic may have been pricey, but with the growing profiles (and notoriety) of tech execs, it's likely costs will only continue to climb.

— Biz Carson (email | twitter)

This story appeared on Protocol.com, read it here.

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People Are Talking

On Protocol | Enterprise: There's a funding bonanza in Silicon Valley right now, says Venrock partner Brian Ascher:

  • "I don't think I've seen a PowerPoint without the word AI in it in the last two years ... It's almost like software equals AI."

NSO Group's Shalev Hulio stood by his company's spyware that was reportedly used to hack dozens of phones:

  • "If even one is true, it is something we will not stand as a company."

Israel's Prime Minister Naftali Bennett wants countries to work together on cybersecurity:

  • "Everything is under attack; our water, our electricity, our food, our cars. Why? Because it is easy and has never been easier."

COVID-19 transformed air travel, Raytheon CEO Gregory Hayes thinks:

  • "Business travel is forever changed, because of Zoom. Our own view is you probably don't see a full recovery in business travel until 2024, 2025. I hope we're wrong."

Elon Musk said SpaceX holds bitcoin, Tesla might start taking it again, and he's standing by it:

  • "We're not selling any bitcoin ... I would like to see bitcoin succeed. If the price of bitcoin goes down, I lose money. I might pump but don't dump."

Making Moves

Core Scientific is going public via a SPAC. The deal will value the crypto mining company at around $4.3 billion.

Olive.com and PayLink Direct are also getting SPAC'd. They plan to merge with MDH Acquisition in a deal valued at $960 million.

Epic Games bought Sketchfab. The 3D asset repository will slot right into the Unreal Engine — and help Epic's metaverse ambitions.

Raphael Lacoste is leaving Ubisoft. The Assassin's Creed art director was with the company for more than a decade, and his departure follows a couple other executive exits in recent months.

Nancy Flores joined Element's board of directors. She's currently McKesson's executive vice president and chief information and technology officer.

In Other News

  • The FTC is taking on right to repair. The agency will release a statement on repair restrictions, which could help companies understand what actions are allowed and what actions the FTC might disagree with.
  • On Protocol | Fintech: Meme stocks turned Public into the anti-Robinhood, and its co-founders told us exactly how that played out.
  • Amazon and Blue Origin lobbied heavily before Jeff Bezos went to space. They collectively spent $5.4 million in the second quarter; Amazon dropped the vast majority of that, on issues ranging from taxes to facial recognition to national security.
  • Uber and Lyft employees went on strike yesterday in nearly a dozen cities. They pushed for legislation that would expand their collective bargaining rights and slammed California's Proposition 22, saying their pay has fallen since it was passed.
  • Clubhouse is no longer a private club. The app ditched its invite-only system, giving entry to roughly 10 million people on the waitlist. Those people, and anyone else who wants to join, will be gradually welcomed onto the app.
  • Meanwhile, Tumblr is getting more exclusive. Bloggers can now charge their followers for access to extra content, which the site hopes will bring in more Gen Z users. The key is paying creators, which Facebook and others are doing a lot more.
  • Twitter's testing a dislike button. Dislikes aren't visible to tweet authors, but will supposedly help Twitter understand what's "valuable."
  • Zoom wants in on video games, too. The company is introducing a few games that can be played with any number of players, including poker and a Q&A game called "Ask Away."

One More Thing

How TikTok really works

TikTok's algorithm is seemingly obvious: If you like enough videos in the same theme, you'll get more of those videos. But it turns out that the app really only needs to know how long you spend on certain videos to understand your interests.

The Wall Street Journal figured that out by creating a bunch of fake accounts, then spending more time on videos of a specific theme, like work or dancing. Eventually, TikTok started serving up videos about those same topics. The whole investigation might not surprise a TikTok addict, but it's still an interesting peek into the inner workings of an algorithm that everyone is in awe over.

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