It's hard to imagine Facebook without its CEO Mark Zuckerberg pulling the strings. The company policy is about to change, though, ensuring Zuckerberg loses control if he leaves.
Zuckerberg currently has a firm grasp on Facebook's interests, controlling shares which guarantee the CEO the majority of votes. At present, company policy is in favour of Zuckerberg, retaining his control even if he leaves. This privilege is also transferrable to his wife and to his progeny.
Facebook Without Zuckerberg
The proposal to change Facebook's certificate of incorporation will basically negate the privileges the current CEO has under his belt. Zuckerberg will only be recognized as just another shareholder if he decides to quit or in the event he's fired. The intention is to ensure control won't be consolidated to the founder and his relatives.
In a report by Business Insider, these changes come with plans to create a new class of non-voting stock. The Facebook CEO also intends to dole out a billion dollars' worth of stock in three years. "These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company," the company board stated.
New Stock Options Comes With Expiry Dates
A sunset provision will also apply to the new class of shares to be offered, which in turn affects Zuckerberg's stock. Shareholder votes are solicited until June 20, with the CEO's 60% vote a deciding factor.
If approved, the new provision authorizes the company to find a new CEO from qualified candidates, without the need for Zuckerberg or his family's approval. It's basically fair game, with the board as the final authority.
USA Today reports the new class of stock offers will shake things a bit in the company. These "C" shares don't come with voting rights, distributed two shares each for class A and a share for each class B stockholder.
Zuckerberg isn't leaving Facebook anytime soon, but the policy ensures the board hires the best replacement that isn't exclusive to the founder's gene pool.
