4 ms·

Minority and even non-voting shareholders still have rights, the majority cannot arbitrarily deprive them of the benefits of ownership. The legal doctrine is "

Minority and even non-voting shareholders still have rights, the majority cannot arbitrarily deprive them of the benefits of ownership. The legal doctrine is "shareholder oppression". If Zuckerberg really did pay more than he had to solely for his benefit at the expense of minority holders then it would be an example of this.

im3w1l 5y ago
He already has bad relations with minority shareholders[0], so I wouldn't be surprised if someone tries to sieze this opportunity. [0] https://www.dailymail.co.uk/news/article-8261775/Facebook-investors-launch-attempt-remove-Mark-Zuckerberg-chairman.html https://www.dailymail.co.uk/news/article-8261775/Facebook-in...
quickthrowman 5y ago
I’m sure a high priced lawyer would argue that Mark Zuckerberg in prison would be a worse outcome than a $5B fine for FB shareholders (I’d tend to agree, but I don’t own any FB outside of index positions exactly for the regulatory/legal risk that FB is exposed to, which I feel the market underestimates)
- tantalor 5y ago
  That's a counterfactual.
  - quickthrowman 5y ago
    Having your CEO in prison would not do good things for the share price, I’m not sure what you mean by counterfactual. It’s a simple calculation of utility: minus $5B in market cap for the fine, vs unknown market cap loss from CEO in prison
    - tantalor 5y ago
      I mean, you are assuming if he is deposed then he will go to prison, whereas we don't actually know what consequences will really occur because you are talking about situation that did not happen (counterfactual to reality).
      - munk-a 5y ago
        In America it's often the case that being indicted or accused is enough to brand you a criminal. Him taking a stand with some propoganda thrown around to make him look a bit guilty could cause significant damage regardless of the truth of the matter.
    - kelnos 5y ago
      Market cap != cash in the bank. Market cap is just a fantasy number that reflects how much people are willing to pay for your stock. I'm sure FB's market cap barely budged after this $5B payout.
      - tantalor 5y ago
        It reflects how much people think the company is worth, which is 5B less (-0.5%) than it was before.
      - quickthrowman 5y ago
        The discussion was about fiduciary duty to shareholders, and share holders care a great deal about market cap since it is a reflection of the current share price. My point was also that Mark Zuckerberg being deposed and/or imprisoned would affect the share price more than the fine. The market cap is a ‘fantasy number’ in the sense that the liquidity doesn’t exist to market sell/buy all outstanding shares at the current bid/ask, I’ll grant you that.
  - munk-a 5y ago
    I really don't like Facebook but I think it's quite accurate. Zuckerberg is the face of Facebook and revealing dirty secrets of his would likely hurt the company value beyond the 5B pricetag. I don't think it's just though.
- nerbert 5y ago
  A great way to not go to prison is to not break the law. It’s also cheaper.
zepearl 5y ago
I think that Matt Levine ( https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthew-s-levine https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe... ) some time ago mentioned a similar case? A CEO being as well a shareholder of the company wears 2 hats => as CEO he has to act in the best interest of the company (which includes all shareholders?) => a conflict with remaining shareholders arises if he as CEO acted for his own personal benefit? Something like this? I think that Matt Levine's conclusion was open, but I'm not sure... .

im3w1l 5y ago

He already has bad relations with minority shareholders[0], so I wouldn't be surprised if someone tries to sieze this opportunity. [0] https://www.dailymail.co.uk/news/article-8261775/Facebook-investors-launch-attempt-remove-Mark-Zuckerberg-chairman.html https://www.dailymail.co.uk/news/article-8261775/Facebook-in...

quickthrowman 5y ago

I’m sure a high priced lawyer would argue that Mark Zuckerberg in prison would be a worse outcome than a $5B fine for FB shareholders (I’d tend to agree, but I don’t own any FB outside of index positions exactly for the regulatory/legal risk that FB is exposed to, which I feel the market underestimates)

tantalor 5y ago
That's a counterfactual.
- quickthrowman 5y ago
  Having your CEO in prison would not do good things for the share price, I’m not sure what you mean by counterfactual. It’s a simple calculation of utility: minus $5B in market cap for the fine, vs unknown market cap loss from CEO in prison
  - tantalor 5y ago
    I mean, you are assuming if he is deposed then he will go to prison, whereas we don't actually know what consequences will really occur because you are talking about situation that did not happen (counterfactual to reality).
    - munk-a 5y ago
      In America it's often the case that being indicted or accused is enough to brand you a criminal. Him taking a stand with some propoganda thrown around to make him look a bit guilty could cause significant damage regardless of the truth of the matter.
  - kelnos 5y ago
    Market cap != cash in the bank. Market cap is just a fantasy number that reflects how much people are willing to pay for your stock. I'm sure FB's market cap barely budged after this $5B payout.
    - tantalor 5y ago
      It reflects how much people think the company is worth, which is 5B less (-0.5%) than it was before.
    - quickthrowman 5y ago
      The discussion was about fiduciary duty to shareholders, and share holders care a great deal about market cap since it is a reflection of the current share price. My point was also that Mark Zuckerberg being deposed and/or imprisoned would affect the share price more than the fine. The market cap is a ‘fantasy number’ in the sense that the liquidity doesn’t exist to market sell/buy all outstanding shares at the current bid/ask, I’ll grant you that.
- munk-a 5y ago
  I really don't like Facebook but I think it's quite accurate. Zuckerberg is the face of Facebook and revealing dirty secrets of his would likely hurt the company value beyond the 5B pricetag. I don't think it's just though.
nerbert 5y ago
A great way to not go to prison is to not break the law. It’s also cheaper.

zepearl 5y ago

I think that Matt Levine ( https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthew-s-levine https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe... ) some time ago mentioned a similar case? A CEO being as well a shareholder of the company wears 2 hats => as CEO he has to act in the best interest of the company (which includes all shareholders?) => a conflict with remaining shareholders arises if he as CEO acted for his own personal benefit? Something like this? I think that Matt Levine's conclusion was open, but I'm not sure... .