Shareholders force Zuckerberg to give up plan for non-voting shares
Mark Zuckerberg is giving up on an audacious plan to sell most of his Facebook shares without diminishing his total control over the company. The plan, which Facebook announced last year, would have given shareholders two new non-voting shares for each voting share they owned. Zuckerberg hoped to sell these shares to finance his charitable ambitions.
But shareholders sued, arguing that the plan would further consolidate power in Zuckerberg's hands with no benefits to other shareholders. Zuckerberg was scheduled to testify in court in the case on Tuesday. Abandoning the plan saves Zuckerberg from having to do that.
Most companies operate according to a one-share-one-vote principle. But several high-profile technology companies, including Google, Facebook, and Snap, give extra per-share voting rights to founders and early investors. These extra votes give Larry Page and Sergey Brin a majority of Google's voting power even though they own much less than half of Google's shares. The same is true at Snap, where co-founders Evan Spiegel and Bobby Murphy together exercise a majority of the company's votes, giving them total control over the company's management.