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New rules would make CEO Mark Zuckerberg lose control of Facebook if he quits

John Ribeiro | June 6, 2016
The Facebook CEO now holds majority voting control of the social networking site.

In a regulatory filing earlier this year, Facebook said that it aimed to create a new class of publicly listed, but non-voting Class C capital stock and, if approved, to issue a one-time dividend of two shares of that new class of capital stock for each outstanding Class A and Class B share held by stockholders.

The reasoning was that the Class C shares could be used for Zuckerberg’s initial philanthropy aims without he losing control of the company, as the Class C stock would be non-voting shares. “The issuance of shares of Class C capital stock could prolong the duration of Mr. Zuckerberg's control of our voting power and his ability to elect all of our directors and to determine the outcome of most matters submitted to a vote of our stockholders,” according to the filing on Thursday. Zuckerberg is also likely to have the final say during the shareholder vote on June 20.

 

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