A day after Mark Zuckerberg's widely-criticized response to Russian use of Facebook to influence the 2016 US election, the Facebook founder and CEO was dealt yet another setback.
Facebook will halt the creation of “C Class” shares following a lawsuit, scrapping a plan to create a new class of non-voting shares for the company that would have allowed Zuckerberg to maintain control of Facebook while giving away his wealth via the Chan Zuckerberg Initiative.
Facebook's decision to scrap the creation of the new non-voting shares comes as Zuckerberg and Facebook are increasingly scrutinized by Congress. Yesterday, Zuckerberg announced Facebook would turn over approximately 3,000 Russia-bought ads to federal lawmakers.
The creation of C Class shares would have entailed a three for one stock split, where one of the three had voting power and the others did not. Zuckerberg could then sell his shares without voting power and maintain control of the company.
“Today, Facebook’s board of directors is announcing a proposal to create a new class of stock that will allow us to achieve both goals. I’ll be able to keep founder control of Facebook so we can continue to build for the long term, and Priscilla and I will be able to give our money to fund important work sooner,” Zuckerberg said in a blog post announcing the shares intended creation.
The suing shareholders claimed that splitting the stock into three would have made the shares less valuable, and demanded the court halt their creation. It never got that far.
Facebook's decision will prevent Zuckerberg from taking the stand, as he was expected to this upcoming Tuesday.
A spokeperson for Grant & Eisenhofer, the law firm representing the shareholders in the suit, told BuzzFeed News, “in an impressive win for Facebook shareholders, the social networking giant has announced it is dropping plans to issue a new class of stock that would have allowed CEO Mark Zuckerberg to retain voting control of the company’s shares even as he sold down his own stake as part of a pledge to give away most of his wealth during his lifetime.”
Developing…
Quelle: <a href="Facebook Scraps Plan To Create Non-Voting Stock Following Lawsuit“>BuzzFeed
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