Facebook's Mark Zuckerberg drops controversial stock plan
Zuckerberg dropped the idea to create a new stock plan which would have helped him fund his philanthropic ventures while maintaining Facebook's control. He wrote that previously that was the 'only way'. Does this mean he is giving up his dream? No, he's still selling almost $12bn of Facebook shares. Zuckerberg revealed that the share price had increased and this wasn't necessary anymore.
In 2016, Facebook had planned to reclassify its stock composition and issue 2 "Class C shares as a one-time stock dividend" which would give economic control minus voting rights. This will ensure that control remains with Zuckerberg while enabling him to liquidate his shares to proceed with his philanthropic interests. He would retain the majority-voting control, without having majority shares.
Zuckerberg's stock plan came under heavy criticism from the investors. They said that this plan would disenfranchise all investors. They said that issues like environmental practices and boardroom diversity are pressed by investors and Facebook's plan would reduce, if not terminate their ability to do this. Therefore letting the company's founder obstruct shareholders' voting rights seems counter intuitive, if not unjust.
Facebook shareholders decided to take Mark Zuckerberg's plan, to create a new class of non-voting stock, to court. The trial will begin on 26 September 2017. The shareholders have submitted controversial texts between Facebook board member Marc Andreessen and Zuckerberg and the former has been accused of training Zuckerberg to get board's nod for the stock change.
The texts submitted also revealed that Mark Zuckerberg does want to join the government. This could mean more shock waves for the investors who will see this as 'reduced commitment' for the company from Zuckerberg's side.