
Mark Zuckerberg Gets to Control Facebook a While Longer - dsri
http://www.bloombergview.com/articles/2016-04-28/mark-zuckerberg-gets-to-control-facebook-a-while-longer
======
abhi3
This is new information, earlier things were like this:

 _If Mr. Zuckerberg were to leave us or if his employment with us were to be
terminated for "cause," under the Current Certificate, he would not be
required to relinquish majority voting control. Moreover, under the Current
Certificate, Mr. Zuckerberg would be able to pass along his shares of Class B
common stock (and potentially his majority voting control depending on sales
or transfers by Mr. Zuckerberg, as well as changes in our share count) to his
descendants after his death, thus leading to potential multi-generational
majority voting control of the company.

The Special Committee and the board of directors believe that attracting a
qualified chief executive officer to succeed Mr. Zuckerberg would be
significantly more difficult if Mr. Zuckerberg, our founder and (in that
event) former chief executive officer, continued to retain majority voting
control of us in such a circumstance. The Special Committee and the board of
directors also believe that the quality of a chief executive officer who would
step into the role under these circumstances is likely to be significantly
lower than it would be if we were no longer controlled by Mr. Zuckerberg,
which could result in the potential loss of significant value for us and our
shares of Class A common stock._

But after this deal Mark cannot retain voting control if he leaves or is fired
for cause. He also cannot pass on his current voting rights if he sells is
shares or his kids inherit them.

Seems like FB did get something in return.

~~~
bitL
Let's see how it will play out once Facebook reaches MySpace-style decline and
shareholders would need to get as much money out of Facebook as they still
will be able to.

~~~
carb
I see this criticism come up a lot, but we have to face the fact that Facebook
is not going to decline like MySpace. Facebook continues to show significant
active user growth still, even though they're much larger than MySpace ever
was. And they're in a much more firm place financially than MySpace ever was.
They're not comparable past their basic functionality of "users have profiles
and a set of friends".

~~~
azemPC
Not too mention facebook completely changes in design and is constantly
evolving its look. If FB still looked like how it did in it's early inception
I doubt it would be as popular.

Perhaps there is some study to be done where social sites/apps become obsolete
if they fail to adapt their UI/UX over the years. I mean look at sites like
Fark and SA compared to what is popular nowadays like Snapchat or Reddit.

~~~
adevine
Reddit? I see lots of comments about how people are amazed Reddit has remained
(or, really, grown) as popular as it is while still having a very "low rent"
UI.

I'd actually argue hallelujah that reddit hasn't significantly altered their
UI. It may not be pretty, but it doesn't take that long to get used to its
quirks, and when you do it is extremely fast and easy to navigate and find
meaningful content. I contrast this to slashdot, who proceeded to make their
UI WORSE with every update (more "modern" styling and response, but they made
it totally broke the usability of their commenting system).

~~~
freehunter
I find the problem with Slashdot the fact that they've updated their styling
to be in line with what was popular in 2006, with a commenting system from
1995. I can't read their comments any better than I can read mailing lists;
they're both horrible, horrible ways of displaying conversations. In my
opinion, their commenting system has been broken since I started reading the
site back when CmdrTaco was still unmarried.

~~~
cgriswald
The UI kept getting worse, but I stuck through it. It was the culture that
eventually drove me away from /.

~~~
bitL
I left Slashdot because of the rampant censorship; if you ever posted
something going against "prevailing wisdom" even if completely true, you might
have found yourself unable to access the home page for a day and your
submission ended up deleted. On completely factual, verifiable things, not
politics/gender/whatever controversy.

------
avivo
Key detail — unlike in the previous arrangement, he (and his heirs) will lose
voting majority when he is no longer CEO or Chairman.
[http://www.bloombergview.com/articles/2016-04-28/mark-
zucker...](http://www.bloombergview.com/articles/2016-04-28/mark-zuckerberg-
gets-to-control-facebook-a-while-longer#footnote-1461859887269) (attempted to
link to footnote 8)

~~~
eloisant
But I guess he can't be fired as CEO if he has voting majority?

------
djent
Can someone explain why someone would want to own Class-C shares? I did some
google searches but did not come up with much information. It seems strange to
sell shares of a company where you don't actually have any say in the company
you own part of.

~~~
wpietri
It basically represents a bet that a steady hand on the tiller is better than
having the company run by whoever is the darling of whoever's happens to own a
big chunk of shares.

It's not an unreasonable view. American public companies have generally become
pretty short-sighted, and financial traders are positively myopic. (A friend
of mine works for a "medium-term" hedge fund, which he says means they hold
shares from hours to days.) If you think a company is better off with a
serious long-term focus and a stable power structure, then you're better off
betting on something where random stock purchasers don't have control.

Historically, I think this is more common in European family-controlled
business empires. But it makes some sense here. Look at how well Amazon,
Apple, and Facebook have done with CEOs who have a long-term focus. I'd be
happier betting on Bezos, Jobs, or Zuckerberg than J Random CEO, who is much
more concerned about hitting quarterly numbers than in maximizing impact on a
multi-decade scale.

~~~
prostoalex
> But it makes some sense here. Look at how well Amazon, Apple, and Facebook
> have done

or Zynga [http://www.thedailybeast.com/articles/2011/12/14/zynga-s-
ipo...](http://www.thedailybeast.com/articles/2011/12/14/zynga-s-ipo-gives-
founder-mark-pincus-a-stock-class-all-his-own.html)

~~~
wpietri
I think one important difference is that Zynga was always essentially an
exploitative company. Amazon and Apple clearly deliver customer value; I'd
argue that Facebook and Google do as well. All of them are building multi-
decade relationships with their users.

Zynga, on the other hand, was the unholy child of an MLM scheme and a slot
machine, a supposed games company that provides very little fun and quite a
lot of addiction. So it's not clear to me that anybody there benefits from a
long-term orientation.

------
TY
Founders, put this in your notebooks if you ever come to the situation where
you ask yourself "but can I do that?". Apparently, yes, you can! [1]

[1] except for those cases where you did not succeed to retain control of the
company from the beginning...

~~~
golergka
Another question that you would want to ask yourself may be "is my company
worth 300+ billion dollars". To say that Facebook is "doing good" is a vast
understatement, and Mark deserves much more shareholders trust than a typical
founder.

~~~
markild
> To say that Facebook is "doing good" is a vast understatement

Superman does good, Facebook's doing well.

~~~
tshannon
Not sure if this was meant to be a grammar correction, or a statement of
truth, but I read it as the latter and chuckled.

------
deegles
But if he has majority vote before he were to leave, couldn't he just revoke
that clause the day before?

~~~
henrikschroder
Yes, but then the other shareholders can drag him to court over it, and he
will most likely lose, because you can't vote to give yourself more power
willy-nilly.

...which is the whole point of this independent committe working through this
change. They're making him give up dynastic control, in exchange for the
ability to cash out without losing control.

~~~
celticninja
Which is the smart thing to do. He can almost ensure dynastic control through
nepotism but he also gets to take value now in case it does go the way of
MySpace.

------
thrusong
What's wrong with Zuck running the company? He's grown it into a big business,
he's steered through many challenges. He may not have always gotten it right,
but this headline makes it sound like he needs to go... Why?

~~~
artemisyna
Zuck still is running the company. This change means that he can keep doing
that while also donating 99% of his stock to charity.

~~~
throwaway_xx9
He's not "donating 99% of his stock to charity."

He's setting up a non-taxable charity vehicle that he controls.

~~~
sleepychu
His original announcement said it wasn't a charity so he could lobby
governments. Has he since said something to the contrary?

------
bunkydoo
Well, wish the guy luck getting into China. I deleted my Facebook and I'm not
looking back to be quite frank

------
shanehoban
First port of call, get Littergram to rename their app!

------
HelloRipley
"helping to cure all diseases by the end of this century"

Such humility. I really want to punch this kid in the face.

~~~
martincmartin
Most philanthropic organizations have extreme goals that are unachievable.
It's easier for people to rally behind "End poverty now!" or "Not one more X!"
than "reduce poverty significantly more than it would otherwise."

~~~
golemotron
What makes it especially stupid is that disease is a whack-a-mole term. We
cure diseases but invent/discover new ones all the time.

------
KKKKkkkk1
All the news I've been hearing lately about Mark Zuckerberg is Wall Street
stuff. I'm curious with all this maneuvering around stock splits, share
classes and tax havens, does he still have free time to bring any value to
Facebook's shareholders as its CEO, beyond what some other Wall Street CEO
would?

~~~
pc86
I think you're on to something, since he's doing all this stuff himself and
doesn't have an army of attorneys and accountants looking out for his best
interests.

------
nevi-me
Forget the voting rights, last time I checked Zuckerberg's net worth it was
about $10B. I remember being a critic of $FB when it was reaching the $19.00
mark after listing. This is impressive!

Hopefully he cedes control (majority voting rights) by selling a bit to
diversify his wealth :)

~~~
henrikschroder
> Hopefully he cedes control (majority voting rights) by selling a bit to
> diversify his wealth :)

The whole point of this change is to allow him to sell almost all his stock
without losing _any_ voting rights. Did you even read the article?

~~~
pc86
It seems most people commenting did not.

