Facebook: CEO Mark Zuckerberg nixes new Facebook share class after shareholder lawsuit

Facebook: CEO Mark Zuckerberg nixes new Facebook share class after shareholder lawsuit [ad_1]

WILMINGTON: Facebook Inc chairman Mark Zuckerberg abandoned plans on Friday to create a new class of company stock with no voting power, which was meant to be a way for Zuckerberg to retain control over the company he founded while fulfilling a pledge to give away his wealth.

Zuckerberg said that he could meet the charity pledge and maintain voting control of Facebook without the change. His decision followed a shareholder lawsuit opposed to the creation of a new class of stock.

10 memorable quotes from Facebook CEO Mark Zuckerberg's speech at Harvard

So far, I could never finish anything at Harvard

"Let's face it, you accomplished something I never could. If I get through this speech today, it'll be the first time I actually finish something here at Harvard."

My best memory from Harvard is meeting Priscilla

"My best memory from Harvard is meeting Priscilla. I had just launched this prank website Facemash, and the ad (administrative) board wanted to 'see me.' Everyone thought I was going to get kicked out. My parents drove up here to help me pack my stuff. My friends threw me a going-away party. Who does that? As luck would have it, Priscilla was at that party with her friends. And we met in line for the bathroom in the Pfoho Belltower (a dorm), and in what must seem like one of the all-time most romantic lines, I turned to her and said: `I'm getting kicked out in three days, so we need to go on a date quickly."

Ideas don't come out fully formed

"Ideas don't come out fully formed. They only become clear as you work on them. You just have to get started. If I had to know everything about connecting people before I got started, I never would have built Facebook."

It's really good to be idealistic

"It's really good to be idealistic. But be prepared to be misunderstood. Anyone working on a big vision is going to get called crazy, even if you end up right."

There is something wrong with our system ...

"There is something wrong with our system when I can leave here and make billions of dollars in 10 years while millions of students can't even afford to pay off their loans, let alone start a business."

Every generation expands its definition of equality

"Every generation expands its definition of equality. Previous generations fought for the vote and civil rights. They had the New Deal and Great Society. And now it's time for our generation to define a new social contract."

We need affordable child care to get to work

"We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas. We're all going to change jobs and roles many times, so we need affordable child care to get to work and health care that's not tied to one employer."

Charity need not always be in money, can be giving time too

"Millennials are already one of the most charitable generations in history. In just one year, more than three in four US millennials donated to charity and more than seven in 10 raised money for another one. But it's not just about giving money. You can also give time. And I promise you, if you just take an hour or two a week -- that's all it takes to give someone a hand and help them reach their potential."

There's always pressure to turn inwards

"Every generation expands the circle of people we consider 'one of us.' And in our generation, that now includes the whole world. ... But we live in an unstable time. There are people left behind by globalization across the whole world. And it's tough to care about people in other places when we don't first feel good about our lives here at home. There's pressure to turn inwards."

Nowadays, it is not a battle of nations but battle of ideas

"This is the struggle of our time. The forces of freedom, openness and global community against the forces of authoritarianism, isolationism and nationalism. Forces for the flow of knowledge, trade and immigration against those who would slow them down. This is not a battle of nations. It's a battle of ideas."

Zuckerberg said in a post on Facebook that the company's stock had performed well enough that he could fund his philanthropy by selling stock for at least 20 years and still retain voting control of the company. In December 2015 Zuckerberg and his wife, Priscilla Chan, a pediatrician, pledged to give away 99% of their Facebook shares to charity.

According to court records, Zuckerberg owns more than 400 million shares of Facebook. That would value his holdings at a minimum of $68.2 billion, based on the company's closing share on Friday of $170.54.

Zuckerberg said he wanted to help solve global challenges "like curing all diseases in our children's lifetime and personalizing education for every student."

Zuckerberg said that over about the next 18 months he planned to sell 35 million to 75 million shares of Facebook, which at Friday's closing price would raise $13 billion.

The decision came as Zuckerberg was scheduled to testify on Tuesday in Wilmington, Delaware, in a shareholder lawsuit seeking to halt the Class C stock plan, which had been approved by shareholders.

Sjunde AP-Fonden, a Swedish national pension fund, and The Amalgamated Bank sued last year, saying that Zuckerberg should have to pay for the right to retain control while selling stock.

"We brought this case challenging a significant change in Facebook corporate governance, and by agreeing to abandon the reclassification we got everything we could have hoped to get," said Lee Rudy of shareholder law firm Kessler Topaz Meltzer & Check.

Rudy said the Class C proposal was rejected by 80 percent of minority shareholders in a vote last year. Zuckerberg controls 60 percent of Facebook's stockholder vote, which helped carry the proposal.

Google, now Alphabet Inc, proposed a similar stock reclassification in 2012, and court records show that Facebook's general counsel suggested Zuckerberg could use it as a model for Facebook.



Google settled with shareholders in a deal that included a $522 million dividend, payable under certain conditions.



Withdrawing the share plan comes as Facebook faces pressure over advertisements on the social network and the role they may have played in last year's U.S. presidential election.



President Donald Trump questioned on Friday the company's decision to overhaul how it handles paid political ads amid investigations into alleged Russian interference in U.S. elections.

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