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This 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," unde
by abhi3 11y ago
This 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 11y 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 11y agoOr Nintendo. 126 years.
- lazaroclapp 11y ago"Nintendo was founded as a card company in late 1889...", sure, but then by the next century FB main business model will probably be about gene engineering, not software. In all fairness, I listed IBM and I can't imagine people referred to it as a "software" company in 1911, even if it was within the 'computing industry' such as it was back then.
- celticninja 11y agoNintendo were in the game business the whole time, the type of game changed due to technology. IBM were in the computer business, they still are its just that the industry has changed so now we think of what theybdo as software and what e.g. Dell do as the computer business
- kbenson 11y ago> IBM were in the computer business Specifically, in the business of selling items to help "computers", a job title for people who computed values.
- hughw 11y agoWhen I was young, an old oil company geophysicist told me, "I remember when a computer was a person."
- btilly 11y agoNope. Its machines were doing tabulation of data stored on punchcards. Humans were not involved in doing the calculations. Human computers were needed for more complex mathematical operations.
- kbenson 11y agoI think that qualifies. Accurate and efficient storage of values through a machine is of help to the people that were operating them. Or perhaps are you implying they were computing as well as tabulating?
- badloginagain 11y ago> Yahoo is 20 years old and not precisely in its prime, and Sun Microsystems existed only for 28 years. > such as Oracle (39 years and counting), Apple (40), Microsoft (41) or, in the extreme, IBM (105). Of which, how many original CEO's are still at the helm?
- smitherfield 11y agoTo be fair, Bill Gates or Larry Ellison would just need to say the words and they'd get the CEO position back in a millisecond. As would Zombie Steve Jobs.
- adventured 11y agoMicrosoft would not replace Satya Nadella with Bill Gates at this point. One of the counter points is very clear: they forced Bill to relinquish his chairman role. The board now would never allow Bill to return as CEO unless the company was in extreme crisis and they needed a temporary leader; they successfully just pried Bill's hands off of a big point of control over Microsoft. There's also no evidence Bill is a stronger candidate to manage the current conglomerate version of Microsoft than Satya (who appears to be doing a fine job so far). Based on the work Bill did the last several years he was actively involved, he has lost a step or three. Further, Bill's age at this point - 60 - is a serious problem, Satya can run Microsoft for 12 years before catching up to that. Jobs by comparison returned to Apple at a mere 42 years old.
- DiabloD3 11y agoYou're having the wrong argument. Bill doesn't WANT the job anymore, he's doing more important things with his life now.
- odonnellryan 11y agoHe owns 18% of the company.
- fma 11y agoIf I was Bill Gates I wouldn't want to go back...he's so rich He can fund any idea he wants. If he goes back to Microsoft he would be under scrutiny of investors. I would say f Microsoft, f investors and do things my way for my ideas.
- deleted 11y ago[deleted]
- Nokinside 11y agoOr Nokia, 150 years and counting.
- coldtea 11y agoAre we still counting for Nokia?
- freehunter 11y agoI mean, they still exist. They may have sold off their phone division, but as long as Cisco and Netgear are still tech companies, Nokia is still a tech company.
- harryh 11y agoWhat does his life expectancy have to do with anything? You think he's still gonna be CEO in his 70s?
- ape4 11y agoStill wearing the same gray T-shirt.
- coldtea 11y agoWhy not? Many people have been the CEO up to their seventies...
- wlesieutre 11y agoBesides which, life expectancy is an averaged value, not a guarantee. He could get hit by a bus at 40 for all we know. Given how much Facebook is worth, it makes plenty of sense to plan for where the voting power goes.
- wpietri 11y agoWhy not? There are plenty of CEOs in their 70s: http://www.theatlantic.com/business/archive/2010/06/the-14-oldest-ceos-in-america-how-much-they-make/58375/#slide1 http://www.theatlantic.com/business/archive/2010/06/the-14-o... And there are a number of CEOs with multi-decade tenures: http://fortune.com/2015/05/05/14-longest-serving-ceos/ http://fortune.com/2015/05/05/14-longest-serving-ceos/ The Bell System had something like a 70-year monopoly, and it's certainly possible that Facebook has staked out something equally enduring.
- fma 11y agoWarren Buffet is 85.
- kevin_thibedeau 11y agoI thought Zuck's life clock was supposed to start flashing when he turned thirty and he was going to have to go on a Logan's Run, being much to old to run a company any more.
- hsod 11y agoHow can he be fired if he has majority control?
- abhi3 11y agoThe board members can vote however they want if they want to fire him. Sure he may have appointed them but can't control how they vote.
- anotherhacker 11y agoVotes for a board are not tied to % ownership in company. For example, people get hired to serve a board of directors and have voting rights, but may not own shares in the company.
- adevine 11y agoTrue, but Zuckerberg also controls who is on the board...
- abhi3 11y agoAddition: He won't have to give up voting rights in facebook in case he took a leave of absence to run/serve in office. https://news.ycombinator.com/item?id=11593322 https://news.ycombinator.com/item?id=11593322
- MicroBerto 11y agoThat's one way to keep his never-ending stream of low cost H1Bs....
- sytelus 11y agoI'm not sure this is good thing. After Bill left Microsoft, the board has gradually replaced pretty much every tech savvy person with investment suits. Wouldn't better arrangement be Zuke transferring voting control to new CEO as opposed to create a vacuum which will be quickly filled by likes of Carl Icans?
- forrestthewoods 11y agoUh.... what? It says "he would NOT be required to relinquish majority voting control". And that he WOULD be able to pass his voting shares to children; "thus leading to potential multi-generational majority voting control of the company" Which is the opposite of what you just said...
- abhi3 11y agoThat is what the current situation is, that changes with this deal.
- forrestthewoods 11y agoAh, you're right! You should have included those quotes too. :) "The new arrangement will convert Zuckerberg's high-vote B shares into A shares if he dies, is fired for cause, or resigns."
- pc86 11y ago> You should have included those quotes too. You should have read the article.
- forrestthewoods 11y agoIt's a work day. I skim articles. Most people skim. This article was written in such a way that skimmers are very likely to walk away with a gross misunderstanding. I'm far from the only person to do so.
- maxerickson 11y agoYou should consider moving the "after this deal" para to the top of your comment. Apparently people are reading too fast or something.
- jsprogrammer 11y agoNo, the post was edited to remove the offending language. Go go transparency
- jsprogrammer 11y agoJust from this text, your conclusion appears to be opposite of the actual case. Control of FB is by bloodline.
- reverend_gonzo 11y agoThis is how it is currently. With this new deal, Zauckerberg loses that. Following paragraph reads: The new arrangement will convert Zuckerberg's high-vote B shares into A shares if he dies, is fired for cause, or resigns.
- jsprogrammer 11y agoThe parent edited their post. When does the deal close?
- henrikschroder 11y agoAfter a formal shareholder vote, where as if by magic, at least 60% of the votes will be in favour of the change.
- deleted 11y ago[deleted]
- bitL 11y agoLet's see how it will play out once Facebook reaches MySpace-style decline and shareholders would need to get as much money out of Facebook as they still will be able to.
- bnb 11y agoFacebook is different than MySpace. Entire families, including grandparents, weren't on MySpace. Facebook has gotten very close to achieving their goal of "Becoming the Internet" for many 40 .
- carb 11y agoI see this criticism come up a lot, but we have to face the fact that Facebook is not going to decline like MySpace. Facebook continues to show significant active user growth still, even though they're much larger than MySpace ever was. And they're in a much more firm place financially than MySpace ever was. They're not comparable past their basic functionality of "users have profiles and a set of friends".
- azemPC 11y agoNot too mention facebook completely changes in design and is constantly evolving its look. If FB still looked like how it did in it's early inception I doubt it would be as popular. Perhaps there is some study to be done where social sites/apps become obsolete if they fail to adapt their UI/UX over the years. I mean look at sites like Fark and SA compared to what is popular nowadays like Snapchat or Reddit.
- adevine 11y agoReddit? I see lots of comments about how people are amazed Reddit has remained (or, really, grown) as popular as it is while still having a very "low rent" UI. I'd actually argue hallelujah that reddit hasn't significantly altered their UI. It may not be pretty, but it doesn't take that long to get used to its quirks, and when you do it is extremely fast and easy to navigate and find meaningful content. I contrast this to slashdot, who proceeded to make their UI WORSE with every update (more "modern" styling and response, but they made it totally broke the usability of their commenting system).