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I'm sorry, but this looks like a selfish, one-sided view. >The plaintiffs suing Facebook's board include pension funds, like the Employee Retirement System for

I'm sorry, but this looks like a selfish, one-sided view. >The plaintiffs suing Facebook's board include pension funds, like the Employee Retirement System for the city of Providence, Rhode Island, and individual investors It may be "founder-friendly", but it's hurting thousands of Average Joes.

moxious 10y ago
In the article one of the main points is protecting Zuckerberg's long term control, in the event that he "spent 2 years in government". If that's not telegraphing intent, I don't know what is. So it appears pretty clear that there's a bigger career game being played here, and it isn't even strictly about stock.
nailer 10y ago
I can see the point, but it could also be argued that a large part of the value of FB is created by the control of Zuckerberg. FB can move much faster without having to move everything past shareholders. And the shareholder's primary interests are making money.
- anotherarray 10y ago
  There are specific laws to protect rights beyond the realms of "speed". Apply your line of thought to democracy and you'll see what's the problem.
  - andrewflnr 10y ago
    The comparison to democracy is a red herring. Facebook isn't a government, it's a company. If you want an accurate government analogy, look at the military: it has to move fast to succeed. You only run a war by committee if you want to lose.
    - steveax 10y ago
      And if you want to run a company without having to deal with shareholders you can stay privately held.
    - anotherarray 10y ago
      I used an analogy to simply demonstrate every entity (e.g. government, corporation, military,etc) must follow specific rules while making decisions. Go radically against these and chaos will erupt. It's both unintelligent and ideological to take speed as an absolute.
    - briffle 10y ago
      Why even have an analogy. There is a perfect Example of Michael Dell wanting more control, and getting together with others to buy dell back, and its no longer publicly traded. They can not have to worry about shareholders, when the (for example) decide to buy EMC..
    - deleted 10y ago
      [deleted]
- h4nkoslo 10y ago
  Even if you own a majority of voting shares, it's a basic principle of corporate law that you still have to treat shareholders equally, you still have to act in a way to maximize shareholder value, and you still have to consult the board & shareholders on the same issues. Owning 51% of voting shares doesn't turn the company into your private fiefdom.
- calbear81 10y ago
  Yes, that's absolutely true if you decide to remain a private company. Your obligations change once you decide to go public - pros and cons.
  - nailer 10y ago
    Aren't you obligated to make the highest returns for shareholders? In that case, wouldn't performing an action that slows down the ability of a company to innovate break that promise?
    - d_e_solomon 10y ago
      >Aren't you obligated to make the highest returns for shareholders? Actually no. As recently as Burwell v Hobby Lobby, the Supreme Court said: "Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not." http://caselaw.findlaw.com/us-supreme-court/13-354.html http://caselaw.findlaw.com/us-supreme-court/13-354.html
      - nailer 10y ago
        Point taken. I should be more exact: is maximising shareholder return a higher priority than maximising shareholder input?
    - rhino369 10y ago
      You get a lot of leeway. There is basically a rebuttable presumption you are acting in the companies best interest. But I wonder if that presumption should be weakened in the cases where the CEO has dictatorial powers over the company without a corresponding share of equity.
    - alexqgb 10y ago
      That's a meaningless goal without a specific time frame. And of course, the moment you do specify a time frame, you also define the range of what you'll actually do in ways that flatly contradict what you'd do with different timelines. For example, if you're trying to maximize cash on hand in the very short term, you simply stop paying your bills and declare bankruptcy when creditors attack. But if your goals are further out, this becomes the exact wrong strategy. Whatever your goal may be, you need a time frame to determine what is and isn't a good use of resources in realizing it. Conversely, anyone who says "maximize shareholder value" without specifying a time frame is either a fool or a grifter. You can imagine how well things go when these types get together and "agree" on something this dangerously unbounded as a fundamental operating principle.
- calbear81 10y ago
  Yes, that's absolutely true if you decide to remain a private company. Your obligations change once you decide to go public - pros and cons.

moxious 10y ago

In the article one of the main points is protecting Zuckerberg's long term control, in the event that he "spent 2 years in government". If that's not telegraphing intent, I don't know what is. So it appears pretty clear that there's a bigger career game being played here, and it isn't even strictly about stock.

nailer 10y ago

I can see the point, but it could also be argued that a large part of the value of FB is created by the control of Zuckerberg. FB can move much faster without having to move everything past shareholders. And the shareholder's primary interests are making money.

anotherarray 10y ago
There are specific laws to protect rights beyond the realms of "speed". Apply your line of thought to democracy and you'll see what's the problem.
- andrewflnr 10y ago
  The comparison to democracy is a red herring. Facebook isn't a government, it's a company. If you want an accurate government analogy, look at the military: it has to move fast to succeed. You only run a war by committee if you want to lose.
  - steveax 10y ago
    And if you want to run a company without having to deal with shareholders you can stay privately held.
  - anotherarray 10y ago
    I used an analogy to simply demonstrate every entity (e.g. government, corporation, military,etc) must follow specific rules while making decisions. Go radically against these and chaos will erupt. It's both unintelligent and ideological to take speed as an absolute.
  - briffle 10y ago
    Why even have an analogy. There is a perfect Example of Michael Dell wanting more control, and getting together with others to buy dell back, and its no longer publicly traded. They can not have to worry about shareholders, when the (for example) decide to buy EMC..
  - deleted 10y ago
    [deleted]
h4nkoslo 10y ago
Even if you own a majority of voting shares, it's a basic principle of corporate law that you still have to treat shareholders equally, you still have to act in a way to maximize shareholder value, and you still have to consult the board & shareholders on the same issues. Owning 51% of voting shares doesn't turn the company into your private fiefdom.
calbear81 10y ago
Yes, that's absolutely true if you decide to remain a private company. Your obligations change once you decide to go public - pros and cons.
- nailer 10y ago
  Aren't you obligated to make the highest returns for shareholders? In that case, wouldn't performing an action that slows down the ability of a company to innovate break that promise?
  - d_e_solomon 10y ago
    >Aren't you obligated to make the highest returns for shareholders? Actually no. As recently as Burwell v Hobby Lobby, the Supreme Court said: "Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not." http://caselaw.findlaw.com/us-supreme-court/13-354.html http://caselaw.findlaw.com/us-supreme-court/13-354.html
    - nailer 10y ago
      Point taken. I should be more exact: is maximising shareholder return a higher priority than maximising shareholder input?
  - rhino369 10y ago
    You get a lot of leeway. There is basically a rebuttable presumption you are acting in the companies best interest. But I wonder if that presumption should be weakened in the cases where the CEO has dictatorial powers over the company without a corresponding share of equity.
  - alexqgb 10y ago
    That's a meaningless goal without a specific time frame. And of course, the moment you do specify a time frame, you also define the range of what you'll actually do in ways that flatly contradict what you'd do with different timelines. For example, if you're trying to maximize cash on hand in the very short term, you simply stop paying your bills and declare bankruptcy when creditors attack. But if your goals are further out, this becomes the exact wrong strategy. Whatever your goal may be, you need a time frame to determine what is and isn't a good use of resources in realizing it. Conversely, anyone who says "maximize shareholder value" without specifying a time frame is either a fool or a grifter. You can imagine how well things go when these types get together and "agree" on something this dangerously unbounded as a fundamental operating principle.
calbear81 10y ago
Yes, that's absolutely true if you decide to remain a private company. Your obligations change once you decide to go public - pros and cons.