
Note from Mark Zuckerberg - eadz
http://newsroom.fb.com/news/2016/04/marknote/
======
rmtew
Regarding:

> Everything we do at Facebook is focused on our mission to make the world
> more open and connected.

I often find that when I follow Facebook links, I get a login page, requiring
me to create an account to see the content.

And not even for Facebook itself, I tried to look at images on Pinterest the
other day, and if I followed more than one link, I'd get an overlay requiring
me to login via Facebook. The site was almost unusable if I wasn't logged into
Facebook.

The only other sites I've visited in a long time, that hide content unless I
login, are newspaper sites.

~~~
lucaspiller
TripAdvisor does something similar, on the mobile web app you can only view
the top 3 reviews and need to download their app to see the rest.

I'm sure some exec thought this would be a great idea to get more downloads,
but when I'm out looking for a restaurant I'm not going to waste my time and
data waiting for their 112mb (iOS) app to download. I'll just base my decision
on the reviews I see or go to one of the many other review sites.

~~~
Grue3
Oh god, TripAdvisor is so horrible now. Even on the desktop, you get shown the
first 3 sentences of each review and if you click "More" you get a full-screen
popup asking you to login.

~~~
ethanbond
At least they're not acting like they're making "a more open and connected
world."

------
blue_dinner
He's 'donating' his money to the non-profit that was created last year. It
sounds noble, but I believe one of the other motives is that he will be able
to keep his money in the family for generations.

He will be able to get around the death tax and pretty much any other taxes
that could take away his fortune. Pretty much every billionaire has done this.

~~~
lazaroclapp
The thing is, his stated goal is to keep 1% of his money in the family for the
next generation. Right now that 1% is 357 million. Estate tax is 40%. He has a
single child as of now. So, that child will inherit 214 million dollars. She
could probably live her entire life of the interest in that money, make her
own (smaller) charitable contributions and still give her own single child the
same amount (adjusted for inflation and accounting for the estate tax). So I
don't believe donating 99% of his money and ensuring the prosperity of his
family for generations are mutually exclusive to Zuckerberg. His philanthropy
does not conflict with his own self-interest. Also, like Gates, Rockefeller,
Carnegie, Stanford, etc, he has a lot of fame and renown to gain from doing
good in his own name and during his lifetime.

Now, don't get me wrong, income inequality is a real problem and the fact that
some world-scale social programs now seem to depend entirely on the wishes of
a few men versus popular administration is in many ways troubling (in others,
well, Bill Gates has potentially done more against AIDS in the third world
than most democratic governments...). But Occam's Razor applies and although I
imagine tax incentives pay a part on how and when billionaires donate (that's
why they are called incentives...), I don't default to thinking that
Zuckerberg is twirling his mustache over this, laughing maniacally and saying
"this is how I shall defraud the IRS!". But let's see, in due time, what
happens. So far the Gates foundation seems legit, for example, and there goes
another mustache twirling villain of the tech world...

~~~
developer2
>> his stated goal is to keep 1% of his money in the family for the next
generation. Right now that 1% is 357 million

1% likely won't be anywhere _near_ 357 million after another 10 years, let
alone in 50+ years. Evaluations of wealth based on assets and stocks almost
never wind up trading for that amount of cash. You are worth what you can
liquidate today, not what market "experts" think your portfolio _could_ be
worth in some theoretical perfect scenario.

~~~
newjersey
I agree that I wouldn't count on the exact dollar figure to stay constant.
However, I believe Bill Gates is successfully divesting himself from Microsoft
to fund his charity? I guess Facebook is a lot shakier and volatile than
Microsoft?

Yes but I'd assume it means the child will have a trust of at least 357M which
isn't bad. I don't have any problem with the 0.01% having tremendous wealth as
long as 1) it is out in the open (at least clear enough that the IRS can see
all its activities) and 2) distributions from the fund get taxed as income for
the recipient

I am making this concession with the assumption that we will drastically
increase marginal income tax on income over a certain amount (my proposal is
100 * 2000 * federal minimum wage per hour which at $15 is $3M). Marginal
income under this threshold shall be no higher than say 40%? Tax on income
above this amount ($3M as calculated today) shall be (just off the top of my
head) 90%? I think that sounds fair.

So, in the example above, if Maxima only draws salary and benefits (cars,
personal jet rides whatever) worth less than $3M per year, I don't see a
reason to see that as bad for society as a whole. I think this keeps the
interests of the 0.01% in touch with the minimum wage. Yes, it sounds rather
naive but it is a working idea. Thoughts?

------
aston
This is a proposed 3:1 stock split which would take the per-share price for
Facebook down to the $30s and also give Zuck the ability to donate 2/3rds of
his resulting shares without any change to his percentage control of the
company.

~~~
zhoutong
It gives _every shareholder_ the ability to sell 2/3 of shares without any
change to their percentage control of the company.

~~~
hnd00d
Both of you are wrong... Let's say there are 100 shares, John owns 25 and Mark
owns 75. Stock splits 3:1, there are now 300 shares, John owns 75 and Mark
owns 225. 2/3 of 225 is 150, if Mark sold 2/3 of that he would not retain his
percentage.

Instead what is happening is a new class of stock will be created that is
valued differently and has different voting rights.

~~~
adevine
Actually, you are wrong. FB is doing a 3-1 stock split, but the newly issued
shares don't have voting rights. So, in your case, Mark would own 225 shares,
but only 75 of those would have voting rights, and 150 would be non-voting.
Thus, he could sell the 150 non-voting shares and still retain the same
percentage of _voting_ control despite only having 1/3 of the "income" rights.

~~~
kgwgk
"Income" that won't be distributed as dividend until he decides so. When he
needs some cash he might prefer to increase the CEO compensation package
instead. Why share the profits with the rest of the owners?

~~~
adevine
A couple reasons:

1\. Legally, Zuckerberg still bears fiduciary responsibility for all
shareholders. If he decided to pay himself all the profits as CEO, he would
get sued, and lose. 2\. Almost all of Zuckerberg's wealth is tied up in his FB
shares. If he starts acting in a way such that other investors don't believe
he will support their interests, the value of those shares will go down. It
would hurt Zuckerberg a lot more than anyone else.

~~~
kgwgk
He can't give himself all the profits, but he can easily raise his
compensation from $5mn to $50mn without raising an eyebrow. He can also untie
his wealth from fb shares while keeping control, as we have seen.

(Actually it seems the $5mn are security expenses and use of corporate
planes... It seems he doesn't really get any compensation beyond the $1
salary? Poor boy...)

------
whack
I admire Zuck wanting to do good for the world, and wanting to sell his FB
shares in order to help others, but this still seems like a bad precedent for
the financial markets in general. The shareholders are the owners of the
company, and the percentage shares they own should represent the percentage
influence they should have in the company. It's easy to dismiss "shareholders"
as being wealthy capitalists, but in reality, the majority of shares are owned
by the middle class, either directly, or indirectly through pension plans and
such. The idea that a "ruling elite" can overrule the wishes of company's
majority owners, and use the company's resources in any way they want, is
conceptually very disturbing. In the long run, it's bound to lead to
corruption, nepotism, and abuse of power.

~~~
tn13
>" should represent the percentage influence they should have in the company"

Something "should have this much value" is often that eventually leads one
down the Orwellian newspeak road eventually.

As an investor I care only about returns and nothing else. If I can get a
little more by giving up the influence I have over company I would gladly do
that.

We must remember that pleasing wallstreet has destroyed many companies.

~~~
BatFastard
> "As an investor I care only about returns and nothing else." This is the
> attitude that gets us slave labor, environmental damage, and stronger
> unions.

------
kylec
It sounds like he's looking to have his cake and eat it, selling his shares
while retaining control.

~~~
a13n
Donating his shares*

Ftfy

~~~
bkeroack
"Donating" his shares to his own charity that he fully controls and his
children will inherit. It's little more than a smart tax shelter.

~~~
onewaystreet
You haven't been paying attention to Mark Zuckerberg's past philanthropic
initiatives if you think that this is just a tax scheme. He _wants_ to have an
impact on the world.

~~~
duaneb
I mean, so did Ghengis. He didn't call his rape + pillage a charity, though.
It just so happens Mark is conquering by forcing the world to depend on him by
rewriting "the internet" to mean "facebook".

~~~
estel
> I mean, so did Ghengis. He didn't call his rape + pillage a charity, though.
> It just so happens Mark is conquering by forcing the world to depend on him
> by rewriting "the internet" to mean "facebook".

Are you seriously comparing MZ pledging to spend millions on fighting disease
and poverty around the world to the (actual) rape, murder and conquest of
thousands of people?

~~~
duaneb
> Are you seriously comparing MZ pledging to spend millions on fighting
> disease and poverty around the world to the (actual) rape, murder and
> conquest of thousands of people?

I'm seriously suggesting that wanting to have an impact on the world doesn't
imply anything positive.

------
calsy
I feel its my responsibility to save the world, kill every disease that
exists, cure world hunger. What a load of toss!

Something always stinks when you read these 'notes' from Zuckerberg. They all
follow the same pattern, 'Im trying to save the world..... So here is a market
update stating why I made these changes to improve my position, cause I'm
saving the world.'

At least Bill Gates has humility and articulates the real world problems he is
trying to solve. Gates works on his charity only, he is not the CEO of
Microsoft and philanthropist.

Maybe you mega corps might want to start paying legitimate tax in foreign
countries before you start telling us how you are saving the world, pffff.

------
incepted
> Everything we do at Facebook is focused on our mission to make the world
> more open and connected.

Call me cynical but to me, Facebook's mission is to get the whole planet to
create a Facebook account and track them so they can be served ads.

~~~
gear54rus
Yeah, exactly, lies as always. Coupled with the comment below about having to
login.

Another corporate bs from that guy, moving right along.

Though I do recommend watching 'The Social Network' (2010) movie, probably the
best thing he has to do with (even though indirectly).

------
eadz
Is my reading correct? - He is selling his dividend bearing shares, but
without losing voting rights?

~~~
JonathonW
Via [http://newsroom.fb.com/news/2016/04/q1-earnings-
note/](http://newsroom.fb.com/news/2016/04/q1-earnings-note/) :

> For each outstanding Class A and Class B share held by our stockholders,
> Facebook intends to issue two new Class C shares as a one-time stock
> dividend. The Class C shares will have the same economic rights as the
> existing Class A and Class B shares. The primary difference is that the
> Class C shares are non-voting.

Functionally, it sounds sort of like a split to allow Zuckerberg to sell off
part of his holdings without losing control of the company?

~~~
amaks
Exactly what Larry Page and Sergey Brin did with GOOG and GOOGL.

~~~
knorker
There already was B class stock with super-voting powers before the GOOG/GOOGL
split, so unless Facebook had that too, then not exactly like it.

------
calcsam
The difference between Silicon Valley and other locales trying to reproduce it
has generally not been money. The difference has been _smart_ money. The
people who hold the purse strings (founder/CEOs, angels, early-stage
investors) have been savvy about what it takes to build and scale a startup.

The problem is that there's always a limited money of smart money available to
deploy at any given time.

The question is then, how do you structure a deal to give unsophisticated
investors (aka dumb money) returns, which they want, without giving them
control, which would ruin the party.

Zuckerberg actually led the way here in 2009 when he got Russian billionaire
Yuri Milner to invest $200M in Facebook at a $10B valuation. Everyone thought
Milner was crazy then. But he went laughing all the way to the bank.

This is another step in that direction, which deserves our applause.

------
electriclove
This is a 3 for 1 stock split in that for each share of FB that you own, you
will receive 2 shares of the new FB share class that do not have voting
rights.

If you don't want to own the non-voting rights shares, sell them and buy the
regular ones. You will lose a little bit due to the difference in price and
the commissions (there may also be tax implications).

It is similar to what Google did last year and what Under Armour did a few
weeks ago. Here's what Google and Under Armour are priced at end of day today:

GOOGL (has voting rights) at 721.46, GOOG at 705.84

UA (has voting rights) at 44.80, UA.C 42.16

------
biztos
I like Facebook, and I'm happy to see a gazillionaire get into philanthropy
this young, but when I see goals like "cure all diseases by the end of this
century" it does make me wonder whether the Foundation might be too
disconnected from reality to get good world-changing value for its money.

~~~
bhups
I see striking similarities between Zuckerberg and the Bill and Melinda Gates
Foundation which managed to entirely rid India of polio (!!). I'm not sure
that it's totally disconnected from reality.

~~~
linuxkerneldev
> Gates Foundation which managed to entirely rid India of polio (!!)

Uhm, that's completely inaccurate, where are you getting such data?

The Gates foundation only got started in 2000, and it isn't clear when they
started getting involved in polio vaccination programs. You may give them
credit for helping towards the end of the project, but vaccination against
polio was started by the Indian taxpayers (Universal Immunization Program) in
1978 and reached about 50% coverage of all infants born in India (including
millions of refugees/migrants from Tibet, Pakistan, Bangladesh, Nepal and Sri
Lanka) by 1984. The programs immunized hundreds of millions of children well
before 2000.

[1]
[http://www.mohfw.nic.in/WriteReadData/l892s/Immunization_UIP...](http://www.mohfw.nic.in/WriteReadData/l892s/Immunization_UIP.pdf)

[2]
[https://en.wikipedia.org/wiki/Pulse_Polio](https://en.wikipedia.org/wiki/Pulse_Polio)

[3]
[http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4078488/](http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4078488/)

Giving all of the credit to Bill&Melinda seems like something Hollywood would
do.

[https://en.wikipedia.org/wiki/White_savior_narrative_in_film](https://en.wikipedia.org/wiki/White_savior_narrative_in_film)

------
1ris
When Google did this I had to pay capital-gain tax on all the "new" shares I
got. About a year later the german tax department changed their view and I got
that back. It sill was very annoying.

------
educar
I will try to believe Mark about making the world a better place when he
builds a world that is not about ads and mining our data.

------
blattus
I'm surprised with how many comments here are focusing on Zuck and not the
market play for Facebook.

I've worked at large companies that claim to be innovative. More often than
not, short-term demands made by Wall Street guide business decisions in
increasingly poor ways (reducing employee benefits, stymieing R&D, etc.)

This announcement obviously helps Zuckerberg personally, but it does also
provide a signal to the market for Facebook's direction.

~~~
forgetsusername
> _More often than not, short-term demands made by Wall Street guide business
> decisions in increasingly poor ways_

Do you have any evidence that this occurs "more often than not"? I look around
America, and the world, and see a _ton_ of successful public companies.
Hundreds. Thousands even. Some of them have been around for over a _century_.

What you're saying is exactly the type of thing someone would say as they try
to wrest control from other owners; that everything will fall apart if they're
not in charge. Silicon Valley likes to paint this picture of the "genius
founder", but it's rarely the case in reality. If Zuck was abducted by aliens
tomorrow, Facebook would live on.

------
bedhead
I'm kinda torn on this. On one hand it's noble and nice to see a rich guy
who's interested in things like this as opposed to kickin it on his yacht with
models all the time. On the other hand, I hate saying this but the use of the
word "responsibility" with regards to "cure all diseases" _reeks_ of egotism
and a guy who's kinda living on a different planet. "Haha, only _I_ can remedy
what you mere mortals stand no hope of ever doing!" I realize I'm being
hyperbolic about it...I really shouldn't criticize I guess.

~~~
duderific
No I agree with you, I found that "cure all diseases" thing hopelessly naive
and ridiculous. He's gonna need to get a little more focused than that if he
really wants to effect changes...maybe pick a couple specific diseases that
have big impacts (cancer, malaria, cholera) and start there.

------
jamisteven
"More open and connected" = more money when you lower your guard and give us
access to personal data that we sell for millions of dollars to corporate
interests.

------
morgante
Considering that this announcement was paired with very strong earnings, it
seems highly likely that they'll give him what he wants.

~~~
khuey
He has voting control of the company. Literally everyone but him can vote
against it and it will still pass.

~~~
dump121
But if shareholders are against this move, the prices would have reflected it.
They are up 9%, so they agree atleast in short term, or we have enough people
who are buying with these terms.

------
studentrob
> To maintain our focus on this mission, we have always been a founder-led
> company.

...

> Today, Facebook’s board of directors is announcing a proposal to create a
> new class of stock that will allow us to achieve both goals. I’ll be able to
> keep founder control of Facebook so we can continue to build for the long
> term, and Priscilla and I will be able to give our money to fund important
> work sooner

This letter sounds like he is preparing to step down as CEO in the next 5
years. Any bets?

He'll maintain "founder control" but doesn't say he'll remain as CEO

------
jalopy
Interesting that he's going to start giving away shares now. Makes me wonder
if he doesn't see much more financial upside to FB, at least at current price
levels.

If there's a lot more value to to accrue to his FB stock (even on a time-
discounted basis), wouldn't he want to rationally wait for the future value of
those shares to materialize to have maximum impact?

Alternatively he could just think that the value to society of funding the
right causes (in his mind) is just that much greater than the time-discounted
future value.

~~~
khuey
Or the foundation he donates the stock to can hold onto (most of) the stock.
Meanwhile he gets to do the tax free transfer now, before Congress can get
around to limiting the size of the tax free transfer you can do or anything
else that might impact his plans.

------
dang
Related post at
[https://news.ycombinator.com/item?id=11584109](https://news.ycombinator.com/item?id=11584109).

------
AndrewKemendo
I wonder if before they announced the 99% plan they didn't realize the
implications and after they started implementing it, the case of founder
ownership came up and they needed to scramble to make a plan - hence the post.

No good deed goes unpunished and all of that.

~~~
gfosco
Nothing he does is short-sighted. I believe it was even mentioned in the
original announcement that they were working on a plan to enable doing this
while maintaining ownership.

------
dpkrjb
So essentially a golden share? If I were an equity holder I would be pretty
annoyed by this news

~~~
kgwgk
If you were an equity holder you could vote against the proposal... but of
course it wouldn't matter because he already has the majority of votes. So you
could be annoyed, but you shouldn't be surprised that he wants to keep control
forever.

------
SilasX
OT, but ...

I'm bothered by how HN mods come down like a hammer on clickbaity titles ("The
one thing that can ensure a safe future"), but when it's some official tech
company/founder announcement, they're fine with extremely vague submission
titles that force you to click on it for any hint on what it's about.

------
jimrandomh
tl;dr: Mark Zuckerberg is proposing to restructure Facebook's stock in a way
that trades his future dividends for present-day spending money. He plans to
spend this money philanthropically, through the Chan Zuckerberg Initiative.

------
thesimpsons1022
why is it a wordpress site?

~~~
bdcravens
Why not? The Facebook platform doesn't have a blogging component, so they have
to use a CMS, or a custom written solution, or just public static HTML.

Perhaps you should jump to the actual value statement you're making ("Real
tech companies shouldn't use X (Wordpress)" or "Real tech companies should use
Y")

~~~
cmelbye
Yes it does, Mark has used it for public letters in the past:
[https://www.facebook.com/notes/mark-zuckerberg/a-letter-
to-o...](https://www.facebook.com/notes/mark-zuckerberg/a-letter-to-our-
daughter/10153375081581634/)

But this is more of an investor relations thing, so that might've had
something to do with it.

------
k__
seriously Mark? Seriously?

You keep control AND get the money and try to sell it with charity?

This is what the 0,0001% wants us to believe...

~~~
ciokan
if i fits i sits

------
boldpanda
Facebook takes a 40% rake from advertisers. Ouch!

$2B income from $5B in ad revenue.

Hopeful businesses just keep running ads and lining Facebook's wallet. If Mark
really wanted to give back, he'd give us more clicks per $.

------
sandworm101
If he wants day-to-day control as a founder but doesn't want to keep an
ownership interest, then he can sell his shares and apply for the job of CEO.
But that means he can be fired. So he wants to be CEO, not own the company,
and yet nobody can fire him. The Romans had a word for that: Tyrant, with
tyrannicide being a virtue. This scheme is doomed. The sooner he realizes it
the fewer heads will roll during the cleanup.

~~~
devindotcom
That escalated quickly!

------
6stringmerc
> _Everything we do at Facebook is focused on our mission to make the world
> more open and connected._

1st thought: Then what's with all the passwords? (tongue-in-cheek)

2nd thought: Open and connected for who? SIGINT?

3rd thought: Well, if that's really the case, then why doesn't FB resemble /b/
a lot more?

4th thought: I'm definitely not the target market here, but I hope people who
try to invest in FB can afford the risk of the investment.

5th thought: Who am I kidding with #4?

