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Yes you can. If you own the shares, you can give them to someone, or to an LLC. That is what happened here. You may be confusing spending corporate money on an

Yes you can. If you own the shares, you can give them to someone, or to an LLC. That is what happened here. You may be confusing spending corporate money on an initiative with the stock used to setup CZI (which was Zuckerberg's to do with as he wished). BTW - in CA which is a community property state, this type of thing is not uncommon - all sorts of trusts, business etc take donated shares (sometimes unsold for tax reasons). In terms of facebook - worth noting that Zuckerberg controls the voting power. This came up when facebook "overpaid" for instragram by giving a small company of 13 employees $1B, which was unheard of at the time. This was a major corporate governance scandal in some circles because the board wasn't consulted. So I read plenty of notes like yours! Outrage! "CEO Mark Zuckerberg made the company’s largest acquisition ever without consulting his board of directors, according to an account in today’s Wall Street Journal." I mention this because you would be amazed at what even companies without voting control in one person's hands will let an executive do if the executive claims it will advance the interests of the company. Own race cars or teams, lease jets, start a research institute. All allowed in most cases even in other companies (and yes, spouses are often in the mix). Anyways, there will be another case soon on this - Tesla shareholders (some) are suing claiming Elons plans / purchase of solar and doing the solar energy business was self dealing (Solar City was basically bust, but Elon wanted to move fast, knew and trusted many of the solar city folks, so bought them instead of some chinese company that might have been better on paper). I think the case is weak, but we will see. The disclosure here that matters potentially is a warning to purchasers of Facebook shares: "As a stockholder, even a controlling stockholder, Mr. Zuckerberg is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements, in his own interests, which may not always be in the interests of our stockholders generally" This metaverse thing is going to be another bet not everyone would go along with, and independent investors ALREADY voted Zuckerberg off as board chair - which made no difference as he could ignore their wishes.

cma 5y ago
Ok, the way I read it, CZI was a subsidiary. Still, they have to sell the name at fair market value if they are wholly separate companies, letting Google get a bid, etc. if they want to stay above board.
- whoknowswhat11 5y ago
  In the CZI case no - CZI can operate in the self interest of its members as an LLC if it is not a charity. Note that there is also the CZI Foundation (folks can get all this confused easily). For private foundations self dealing with disqualified people (directors / officers etc) is prohibited - even if the transaction is "fair". This is because it can be hard to say what is fair. But for public charities you can have self dealing transactions if they are "fair". This is where the problem is. By the time you have attorney's / appraisers etc involved - and you are paying all of them, there often is not someone in a position to challenge the results who cares about the transactions. And the IRS (which folks keep refering to here) is way WAY behind and this is bottom of their list stuff as they don't get much money from this (vs billions they could get elsewhere). This is not the case in all states. The IRS is way behind, but places like California have very active charitable oversight. In California you can go to the AG's office, tell them of the deal. They then have 2 years to complain or you can ask them to approve the deal in advance. If you DON'T request approval or give notice the AG's office has 10 years to sue you if they think the deal was unfair.

cma 5y ago

Ok, the way I read it, CZI was a subsidiary. Still, they have to sell the name at fair market value if they are wholly separate companies, letting Google get a bid, etc. if they want to stay above board.

whoknowswhat11 5y ago
In the CZI case no - CZI can operate in the self interest of its members as an LLC if it is not a charity. Note that there is also the CZI Foundation (folks can get all this confused easily). For private foundations self dealing with disqualified people (directors / officers etc) is prohibited - even if the transaction is "fair". This is because it can be hard to say what is fair. But for public charities you can have self dealing transactions if they are "fair". This is where the problem is. By the time you have attorney's / appraisers etc involved - and you are paying all of them, there often is not someone in a position to challenge the results who cares about the transactions. And the IRS (which folks keep refering to here) is way WAY behind and this is bottom of their list stuff as they don't get much money from this (vs billions they could get elsewhere). This is not the case in all states. The IRS is way behind, but places like California have very active charitable oversight. In California you can go to the AG's office, tell them of the deal. They then have 2 years to complain or you can ask them to approve the deal in advance. If you DON'T request approval or give notice the AG's office has 10 years to sue you if they think the deal was unfair.