Facebook’s board is proposing to remove Mark Zuckerberg’s majority voting control if he decides to ever leave the company.
Shareholders are being asked to vote on the proposal that would convert the CEO and founder’s Class B shares into Class A shares if he were to exit, according to a proxy filing submitted on Thursday with the U.S. Securities and Exchange Commission.
“These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company,” said the board in the filing.
Zuckerberg owns roughly 4 million Class A shares and 419 million Class B shares, as of June 2nd – with a voting power of 53.8 percent, even if he decides to leave. Current provisions also state that he would be allowed to pass his Class B shares (and possibly his majority voting) to descendants after his death.
If this proposal received enough votes, his economic stake in the company would remain the same, however his voting power would be reduced. The proposal will be voted on at Facebook’s annual meeting on June 20th.
“The Special Committee and our board of directors believe the reclassification is an appropriate way to make it more likely that Mr. Zuckerberg will remain in a leadership role, and thus in a position to influence our direction for many years, and we believe that this influence has been and will be beneficial to our growth, strategy, and stability,” they wrote.
