9 ms·
Mark Zuckerberg Gets to Control Facebook a While Longer
- HelloRipley 10y ago"helping to cure all diseases by the end of this century" Such humility. I really want to punch this kid in the face.
- martincmartin 10y agoMost philanthropic organizations have extreme goals that are unachievable. It's easier for people to rally behind "End poverty now!" or "Not one more X!" than "reduce poverty significantly more than it would otherwise."
- golemotron 10y agoWhat makes it especially stupid is that disease is a whack-a-mole term. We cure diseases but invent/discover new ones all the time.
- deleted 10y ago[deleted]
- thrusong 10y agoWhat's wrong with Zuck running the company? He's grown it into a big business, he's steered through many challenges. He may not have always gotten it right, but this headline makes it sound like he needs to go... Why?
- artemisyna 10y agoZuck still is running the company. This change means that he can keep doing that while also donating 99% of his stock to charity.
- throwaway_xx9 10y agoHe's not "donating 99% of his stock to charity." He's setting up a non-taxable charity vehicle that he controls.
- sleepychu 10y agoHis original announcement said it wasn't a charity so he could lobby governments. Has he since said something to the contrary?
- tomelgin 10y agoIt is a taxable LLC. He doesn't get the tax-benefits of setting up a nonprofit, but he has much more freedom in how to use the money (e.g. including making investments vs donations, and including non-tax-deductible political activism). https://en.wikipedia.org/wiki/Chan_Zuckerberg_Initiative#Company_form_and_taxation https://en.wikipedia.org/wiki/Chan_Zuckerberg_Initiative#Com...
- thrusong 10y agoI get all of that, but why does the headline say "he gets to run the company a while longer?" That makes it sound like he's a detriment to the company.
- artemisyna 10y agoUnder the previous stock arrangement, he wouldn't have been able to both donate his stock and keep control of the company. I can see how the headline could be interpreted as Zuck being detrimental, but I don't think that was the intent.
- thrusong 10y agoAhh, OK. It seemed like some of the comments were echoing the headline.
- bunkydoo 10y agoWell, wish the guy luck getting into China. I deleted my Facebook and I'm not looking back to be quite frank
- shanehoban 10y agoFirst port of call, get Littergram to rename their app!
- abhi3 10y agoThis is new information, earlier things were like this: If Mr. Zuckerberg were to leave us or if his employment with us were to be terminated for "cause," under the Current Certificate, he would not be required to relinquish majority voting control. Moreover, under the Current Certificate, Mr. Zuckerberg would be able to pass along his shares of Class B common stock (and potentially his majority voting control depending on sales or transfers by Mr. Zuckerberg, as well as changes in our share count) to his descendants after his death, thus leading to potential multi-generational majority voting control of the company. The Special Committee and the board of directors believe that attracting a qualified chief executive officer to succeed Mr. Zuckerberg would be significantly more difficult if Mr. Zuckerberg, our founder and (in that event) former chief executive officer, continued to retain majority voting control of us in such a circumstance. The Special Committee and the board of directors also believe that the quality of a chief executive officer who would step into the role under these circumstances is likely to be significantly lower than it would be if we were no longer controlled by Mr. Zuckerberg, which could result in the potential loss of significant value for us and our shares of Class A common stock. But after this deal Mark cannot retain voting control if he leaves or is fired for cause. He also cannot pass on his current voting rights if he sells is shares or his kids inherit them. Seems like FB did get something in return.
- lazaroclapp 10y agoThe more interesting part here, is that Zuckerberg being 31 years old, and having a life expectancy of 82.3 years, means the people who insisted on this agreement believe there is a significant chance of Facebook still being around 51 years from now. By comparison Yahoo is 20 years old and not precisely in its prime, and Sun Microsystems existed only for 28 years. That said, it means investors are betting on FB being a long lived (software) company, such as Oracle (39 years and counting), Apple (40), Microsoft (41) or, in the extreme, IBM (105).
- paublyrne 10y agoOr Nintendo. 126 years.
- deleted 10y ago[deleted]
- nevi-me 10y agoForget the voting rights, last time I checked Zuckerberg's net worth it was about $10B. I remember being a critic of $FB when it was reaching the $19.00 mark after listing. This is impressive! Hopefully he cedes control (majority voting rights) by selling a bit to diversify his wealth :)
- onewaystreet 10y agoFacebook's stock price has gone up a lot since you last checked. His net worth now is $44.6B (making him the 6th richest person in the world).
- tdicola 10y agoAnd almost all of it (99%) is going to charity: http://www.businessinsider.com/mark-zuckerberg-giving-away-99-of-his-facebook-shares-2015-12 http://www.businessinsider.com/mark-zuckerberg-giving-away-9...
- majewsky 10y agoWell yeah, to the Chan Zuckerberg Initiative. Putting your money into your own foundation is a well-known tax evasion scheme.
- adventured 10y agoIn fact it's not a well known tax evasion scheme. The only thing well known about that, is the bogus claim that it is such. 1) Tax evasion, is not the same as tax avoidance. 2) Try putting money into a foundation, acquire the tax benefit of doing so, and then try giving it back to yourself. See what happens. 3) The Zuckerberg Chan Initiative is not a charitable foundation. It's a corporation, an LLC. Please explain how Zuckerberg will be using that to evade taxes. By law they will pay capital gains taxes upon any sale of the stock. How is that evading taxes? If they had wanted to limit taxes, they would have created a traditional foundation. The current structure gives Zuckerberg no added benefit over what he already has.
- avivo 10y agoKey detail — unlike in the previous arrangement, he (and his heirs) will lose voting majority when he is no longer CEO or Chairman. http://www.bloombergview.com/articles/2016-04-28/mark-zuckerberg-gets-to-control-facebook-a-while-longer#footnote-1461859887269 http://www.bloombergview.com/articles/2016-04-28/mark-zucker... (attempted to link to footnote 8)
- eloisant 10y agoBut I guess he can't be fired as CEO if he has voting majority?
- djent 10y agoCan someone explain why someone would want to own Class-C shares? I did some google searches but did not come up with much information. It seems strange to sell shares of a company where you don't actually have any say in the company you own part of.
- cbhl 10y agoIf you really want to have a say at Facebook or Google, the best way to do that is to work there, not through shareholder votes.
- wpietri 10y agoIt basically represents a bet that a steady hand on the tiller is better than having the company run by whoever is the darling of whoever's happens to own a big chunk of shares. It's not an unreasonable view. American public companies have generally become pretty short-sighted, and financial traders are positively myopic. (A friend of mine works for a "medium-term" hedge fund, which he says means they hold shares from hours to days.) If you think a company is better off with a serious long-term focus and a stable power structure, then you're better off betting on something where random stock purchasers don't have control. Historically, I think this is more common in European family-controlled business empires. But it makes some sense here. Look at how well Amazon, Apple, and Facebook have done with CEOs who have a long-term focus. I'd be happier betting on Bezos, Jobs, or Zuckerberg than J Random CEO, who is much more concerned about hitting quarterly numbers than in maximizing impact on a multi-decade scale.
- prostoalex 10y ago> But it makes some sense here. Look at how well Amazon, Apple, and Facebook have done or Zynga http://www.thedailybeast.com/articles/2011/12/14/zynga-s-ipo-gives-founder-mark-pincus-a-stock-class-all-his-own.html http://www.thedailybeast.com/articles/2011/12/14/zynga-s-ipo...
- wpietri 10y agoI think one important difference is that Zynga was always essentially an exploitative company. Amazon and Apple clearly deliver customer value; I'd argue that Facebook and Google do as well. All of them are building multi-decade relationships with their users. Zynga, on the other hand, was the unholy child of an MLM scheme and a slot machine, a supposed games company that provides very little fun and quite a lot of addiction. So it's not clear to me that anybody there benefits from a long-term orientation.
- TY 10y agoFounders, put this in your notebooks if you ever come to the situation where you ask yourself "but can I do that?". Apparently, yes, you can! [1] [1] except for those cases where you did not succeed to retain control of the company from the beginning...
- golergka 10y agoAnother question that you would want to ask yourself may be "is my company worth 300+ billion dollars". To say that Facebook is "doing good" is a vast understatement, and Mark deserves much more shareholders trust than a typical founder.
- henrikschroder 10y agoWell, you can do this if you retained control from the beginning, if your company is doing great, and if your current shareholders won't revolt and drag you to court over it.
- KKKKkkkk1 10y agoAll the news I've been hearing lately about Mark Zuckerberg is Wall Street stuff. I'm curious with all this maneuvering around stock splits, share classes and tax havens, does he still have free time to bring any value to Facebook's shareholders as its CEO, beyond what some other Wall Street CEO would?
- deegles 10y agoBut if he has majority vote before he were to leave, couldn't he just revoke that clause the day before?
- henrikschroder 10y agoYes, but then the other shareholders can drag him to court over it, and he will most likely lose, because you can't vote to give yourself more power willy-nilly. ...which is the whole point of this independent committe working through this change. They're making him give up dynastic control, in exchange for the ability to cash out without losing control.
- celticninja 10y agoWhich is the smart thing to do. He can almost ensure dynastic control through nepotism but he also gets to take value now in case it does go the way of MySpace.
- deleted 10y ago[deleted]