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Zukerberg’s Control Sought to be Curbed by Facebook’s Board in the Eventuality of his Departure


06/03/2016


Zukerberg’s Control Sought to be Curbed by Facebook’s Board in the Eventuality of his Departure
To enable the smooth running of the company’s affairs in the eventuality of the social media giant Facebook’s chief executive and founder, Mark Zuckerberg, deciding to exit management at some point in future, the company’s board has proposed removing Mark Zuckerberg's majority voting control.
 
In the case of Zukerberg not being able to lead the company and no longer remains in the leadership role, Facebook’s board wants to convert Zuckerberg's Class B shares into Class A shares. The board of the social media giant will ask shareholders to vote on a proposal that would, said the board in a proxy filing very recently with the U.S. Securities and Exchange Commission.
 
Collectively representing about 53.8 percent of total outstanding voting power and 14.8 percent of total outstanding economic interests, Zuckerberg beneficially owned about 4 million Class A shares and about 419 million Class B shares as of June 2.
 
The board said that the aim of the proposal is designed to make sure a future Facebook chief's management powers aren't limited. Voting of the proposed move is to be conducted at Facebook's annual general meeting on June 20 by the shareholders.
 
"These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company," the board said in the filing.
 
Even if Zukerberg leaves the company, he is allowed to hold Class B shares and exercise majority voting control according to the current provisions of the company. Passing of Zukerberg’s Class B shares, and possibly his majority voting control, is allowed to be passed on to his descendants after his death under the present provisions of the company that he himself set up.
 
Last week, Zukerberg was severely criticized to be running Facebook in a dictatorial manner even though it is a public limited company. The co-founder of file sharing site The Pirate Bay told CNBC last week that Faceboook boss Mark Zuckerberg is the "dictator" of "the biggest nation in the world" while he was presenting his views on the centralization of power on the internet.
 
Peter Sunde said that there is "no democracy" online while speaking during an interview at The Next Web conference in Amsterdam.
 
"People in the tech industry have a lot of responsibilities but they never really discuss these things ... Facebook is the biggest nation in the world and we have a dictator, if you look at it from a democracy standpoint, Mark Zuckerberg is a dictator. I did not elect him. He sets the rules," Sunde told CNBC.
 
"And really you can't opt out of Facebook. I'm not on Facebook but there are a lot of drawbacks in my offline world. No party invitations, no updates from my friends, people stop talking to you, because you're not on Facebook. So it has real life implications," he had said.
 
There were however no comments from Facebook about the allegations.
 
(Source:www.cnbc.com)